Author: admin

America’s seaports are now starting to feel the chilling effects of supply chain disruptions from China, warned Noel Hacegaba, the Deputy Executive Director of Administration and Operations for the Port of Long Beach, California. 

Hacegaba said the Port of Long Beach, the second-largest containerized port in the US – is experiencing weakness in volume, down 6% YoY in January, and down another 6% YoY in February. For the quarter, he said the port could see a decline of 12% YoY.

He warned that economic paralysis in China has led to blank sails of containerships across shipping lanes between China and the US. 

World Maritime News adds more color onto blank sailings and economic loss that is shocking the global shipping industry right down to the haul. 

So far, 105 blank sailings between Asia to North America and Europe have been recorded from January 20 to February 10. The shuttering of dozens of manufacturing hubs in China for virus containment purposes has left the country’s factory output well below full capacity in February, and likely depressed into March.   

Data from the UK-based maritime research consultancy, Drewry, said, “the cancellation of 105 sailings per month represents a shortfall in revenue of roughly USD 1 billion (105 x 10,000 TEU x USD 1,000), of which a portion will be made up later via full ships and extra loaders, but the short term damage to carrier profits is large.” 

Drewry said port operations in China remained down 20 to 40% during the period. It said ports in the US are only now starting to feel the shock, which is what Hacegaba described last week was beginning at West Coast ports. 

Drewry warned that the plunge in container volume in China would severely weigh on global port volumes for the quarter: 

“Cargo owners and shipping lines are desperate for a swift resolution that will see Chinese factories resume production and start churning out the goods and parts that grease the global supply chain. It is inevitable that world port throughput will suffer a large contraction in 1Q20, but the question is now whether we can expect a v-shaped recovery later this year or something else entirely?” 

For some color on why container volumes in China and likely the rest of the world will collapse this quarter, we specifically outlined in semi-official data from China that business conditions are printing at depression levels (as a reminder, China has been responsible for 60% of the world’s credit creation in the last decade – if China’s catches the flu – so does everyone): 

• China Has Ground To A Halt: “On The Ground” Indicators Confirm Worst-Case Scenario
• China Is Disintegrating: Steel Demand, Property Sales, Traffic All Approaching Zero
• Terrifying Charts Show China’s Economy Remains Completely Paralyzed

And for confirmation of China’s economic paralysis, China’s National Statistics Bureau reported Friday night the latest, February PMIs and they were absolutely catastrophic:

• Manufacturing PMI crashed to 35.7 in Feb, far below the 45.0 consensus estimate, and sharply down from 50.0 in January. A record low.
• Non-Manufacturing PMI plummets to 28.9, also far below the 50.5 consensus, estimate, and down nearly 50% from the 54.1 in Jan. This too was a record low.

Putting these numbers in context, the collapse in China’s economy will continue to weigh on global supply chains that are entirely dependent on the Asian country as a manufacturing source. 

“Whatever the outcome, COVID-19 has exposed the fragility of global supply chains that are overly dependent on a single manufacturing source. We suspect that shippers will look to broaden their sourcing options as a form of insurance,” Drewry said.

The nightmare scenario is that the virus outbreak shocks the world into recession as containerized volumes collapse along with trade growth would be devastating for the shipping industry: 

“Under this scenario, we anticipate a prolonged downturn for freight rates and an elevated risk of a carrier bankruptcy. To avoid such a prospect, carriers would be forced to revisit the playbook from the financial crash of a decade before and undertake large scale capacity withdrawal in the form of mass idling and demolitions,” Drewry concludes.

And for all those expecting that Beijing will unleash another massive stimulus to kick-start the economy at any cost, it seems that the likelihood of another round of massive stimulus appears low, which means markets are underestimating the scale of the growth slump. 

The outbreak in South Korea and Japan may be the next big concern for American ports, as creaking global supply chains has underlined the fragility of the global economy. 

“The Democratic field is poor, but Trump is dead. Quote me on that!”

That’s Nouriel Roubini’s take on how the escalating global health crisis will morph into a financial crisis (it’s starting) and a political crisis…

In an interview with Germany’s Der Speigel, Dr.Doom – who correctly predicted the bursting of the U.S. housing bubble in addition to the 2008 financial crisis along with the ramifications of austerity measures for debt-laden Greece – believes that coronavirus will lead to a global economic disaster and that U.S. President Donald Trump will not be re-elected as a result.

DER SPIEGEL: How severe is the coronavirus outbreak for China and for the global economy?

Roubini: This crisis is much more severe for China and the rest of the world than investors have expected for four reasons: First, it is not an epidemic limited to China, but a global pandemic. Second, it is far from being over. This has massive consequences, but politicians don’t realize it.

DER SPIEGEL: What do you mean?

Roubini: Just look at your continent. Europe is afraid of closing its borders, which is a huge mistake. In 2016, in response to the refugee crisis, Schengen was effectively suspended, but this is even worse. The Italian borders should be closed as soon as possible. The situation is much worse than 1 million refugees coming to Europe.

DER SPIEGEL: What are your other two reasons?

Roubini: Everyone believes it’s going to be a V-shaped recession, but people don’t know what they are talking about. They prefer to believe in miracles. It’s simple math: If the Chinese economy were to shrink by 2 percent in the first quarter, it would require growth of 8 percent in the final three quarters to reach the 6 percent annual growth rate that everyone had expected before the virus broke out. If growth is only 6 percent from the second quarter onwards, which is a more realistic scenario, we would see the Chinese economy only growing by 2.5 to 4 percent for the entire year. This rate would essentially mean a recession for China and a shock to the world.

DER SPIEGEL: And your last point?

Roubini: Everyone thinks that policymakers will react swiftly but that’s also wrong. The markets are completely delusional. Look at fiscal policy: You can do fiscal stuff only in some countries like Germany, because others like Italy don’t have any leeway. But even if you do something, the political process requires a great deal of talking and negotiating. It takes six to nine months, which is way too long. The truth is: Europe would have needed fiscal stimulus even without the corona crisis. Italy was already on the verge of a recession, as was Germany. But German politicians aren’t even thinking about stimulus, despite the country being so exposed to China. The political response is a joke – politicians are often behind the curve. This crisis will spill over and result in a disaster. 

DER SPIEGEL: What role do the central banks have to play?

Roubini: The European Central Bank and the Bank of Japan are already in negative territory. Of course, they could lower rates on deposits even further to stimulate borrowing but that wouldn’t help the markets for more than a week. This crisis is a supply shock that you can’t fight with monetary or fiscal policy.

DER SPIEGEL: What will help?

Roubini: The solution needs to be a medical one. Monetary and fiscal measures do not help when you have no food and water safety. If the shock leads to a global recession, then you have a financial crisis, because debt levels have gone up and the U.S. housing market is experiencing a bubble just like in 2007. It hasn’t been a time bomb so far because we have been experiencing growth. That is over now.

DER SPIEGEL: Will this crisis change the way the Chinese people think of their government?

Roubini: Businesspeople tell me that things in China are much worse than the government is officially reporting. A friend of mine in Shanghai has been locked in his home for weeks now. I don’t expect a revolution, but the government will need a scapegoat.

DER SPIEGEL: Such as?

Roubini: Already, there were conspiracy theories going around about foreign interference when it comes to swine flu, bird flu and the Hong Kong uprising. I assume that China will start trouble in Taiwan, Hong Kong or even Vietnam. They’ll crack down on protesters in Hong Kong or send fighters over Taiwanese air space to provoke the U.S. military. It would only take one accident in the Strait of Formosa and you would see military action. Not a hot war between China and the U.S., but some form of action. This is what people in the U.S. government like Secretary of State Mike Pompeo or Vice President Mike Pence want. It’s the mentality of many people in D.C.

DER SPIEGEL: This crisis is obviously a setback for globalization. Do you think politicians like Trump, who want their companies to abandon production abroad, will benefit?

Roubini: He will try to reap benefits from this crisis, that’s for sure. But everything will change when coronavirus reaches the U.S. You can’t build a wall in the sky. Look, I live in New York City and people there are hardly going to restaurants, cinemas or theaters, even though nobody there has been infected by the virus thus far. If it comes, we are totally fucked.

DER SPIEGEL: A perfect scare-scenario for Trump?

Roubini: Not at all. He will lose the election, that’s for sure.

DER SPIEGEL: A bold prediction. What makes you so sure?

Roubini: Because there is a significant risk of a war between the U.S. and Iran. The U.S. government wants regime change, and they will bomb the hell out of the Iranians. But Iranians are used to suffering, believe me, I am an Iranian Jew, and I know them! And the Iranians also want regime change in the U.S. The tensions will drive up oil prices and lead inevitably to Trumps defeat in the elections.

DER SPIEGEL: What makes you so sure?

Roubini: This has always the case in history. Ford lost to Carter after the 1973 oil shock, Carter lost to Reagan due to the second oil crisis in 1979, and Bush lost to Clinton after the Kuwait invasion. The Democratic field is poor, but Trump is dead. Quote me on that!

DER SPIEGEL: A war against Iran is needed to beat Trump?

Roubini: Absolutely, and it’s worth it. Four more years of Trump means economic war!

DER SPIEGEL: What should investors do to brace for the impact?

Roubini: I expect global equities to tank by 30 to 40 percent this year. My advice is: Put your money into cash and safe government bonds, like German bunds. They have negative rates, but so what? That just means that prices will rise and rise – you can make a lot of money that way. And if I am wrong and equities go up by 10 percent instead, that’s also OK. You have to hedge your money against a crash, that is more important. That’s my motto: “Better safe than sorry!”

As humanity struggles to “adapt” to the coronavirus outbreak, which has suddenly introduced a patina of sinister risk to mundane activities like greeting a friend or visiting the supermarket, the Yon Loo Lin School of Medicine has published a ‘new greetings’ guide to help people in virus-stricken communities learn new greetings like the “elbow tap”, “foot shake” and, of course, the “wave.”

Dr. Sylvie Briand, the WHO’s director of epidemic and pandemic, tweeted a screenshot of what appears to be a new WHO guide to these ‘alternatives’ to the cheek-kiss and the handshake, popular greetings throughout the world.

We need to adapt to this new disease #COVID19 https://t.co/SiCL6dX2dQ

— Dr Sylvie Briand (@SCBriand) March 1, 2020

We’ve mentioned this issue a few times in recent days. Videos shared on Twitter suggest that the ‘foot shake’ is gaining popularity in Iran.

In Iran, using legs instead of hands to greet each other, in fear of corona virus outbreak.#Coronavirius pic.twitter.com/wAYXyA6gtS

— Azhar Al-Rubaie | أزهر الربيعي (@AzherRubaie) February 23, 2020

Walter Cotte, the regional director of the international federation of the Red Cross and Red Crescent for America and the Caribbean, shared the guide on twitter.

pic.twitter.com/iPWbN82jsX

— Walter Cotte W. (@waltercotte) March 1, 2020

The final pane on the comic-format graphic encourages readers to develop their own greetings.

Funny, we thought of one:

Authored by Jonathan Turley,

There is a yawning chasm between the reality and rhetoric of gun control in light of promises in the Democratic primary. The fact is that many of the ideas raised by the candidates have merit but they are likely to be marginal in their impact on real gun-related fatalities.

The Democratic presidential debate down in South Carolina this week has proven once again the famous line that there are “lies, damned lies, and statistics.” The line is the perfect warning to the unwary about politicians citing statistics. The quote itself is widely misrepresented as the work of Mark Twain or British Prime Minister Benjamin Disraeli, so it seems nothing can be trusted when it comes to statistics, not even quotes on statistics.

Some false statistics, however, are so facially absurd that they are indeed harmless except to the most gullible. That was the case when former Vice President Joe Biden attacked Senator Bernie Sanders over a vote that had favored the gun industry. Biden declared that, since the vote, 150 million Americans have been killed by guns. He also said the vote happened in 2007, when it was actually in 2005. Many people immediately scratched their heads, thinking they may have missed a holocaust that had claimed roughly half the population. Later, the Biden campaign insisted it was just another one of his gaffes and the real number is 150,000 Americans.

However, even that figure is wrong, but a Democratic primary is no place for the factually preoccupied. Trillions have been pledged for reparations, free college tuition, free medical care and free child care, all to be funded using math that would embarrass Bernie Madoff. First, on the threshold statistical controversy, the Centers for Disease Control and Prevention claims that all gun deaths since 2007 total about 450,000. Thus, Biden went from overstating it by more than 300 times to understating it by three times. It is possible to get this figure down to around 180,000 by excluding the 60 percent of gun deaths that occur due to suicide.

The much greater danger, however, is not the statistical but the legal misrepresentations on gun control, and those are not confined just to Biden. After all, cracking down on guns is one of the defining issues for former New York City Mayor Michael Bloomberg, who has pledged to “stop this nationwide madness.”

In the debate, Biden dramatically glared into the camera to speak directly to the National Rifle Association: the NRA:

“I want to tell you, if I’m elected NRA, I’m coming for you, and, gun manufacturers, I’m going to take you on and I’m going to beat you.”

The other Democratic candidates have made similar claims that they will reduce gun violence significantly with executive orders and laws.

Such statements are far more dishonest than the statistical flight of fancy promoted by Biden. Gun ownership is an individual constitutional right under the Second Amendment. A constitutional right cannot be reduced or changed by either executive order or legislation. You can only work on the margins of such exercises of constitutional rights, which belies the promise by Bloomberg that these measures would make an “enormous difference.”

Elizabeth Warren declared that “we need a president willing to take executive action” to end gun violence without any explanation what she can do to limit an individual right, let alone do it unilaterally.

It is true that, in the 2007 case of District of Columbia versus Dick Anthony Heller, the Supreme Court held that “like most rights, the right secured by the Second Amendment is not unlimited.” But like other constitutional rights such as the freedom of speech, legally imposed limits cannot deny the right itself but only place reasonable limits on its use. Thus, it may be possible to limit the size of ammunition magazines or such devices as bump stocks. Certainly, background checks would be allowed.

Red flag laws allowing interventions are also likely to pass muster. But those limits are unlikely to “enormously” reduce gun violence. The vast majority of gun possessors, and many of those involved in massacres, would pass background checks. Indeed, there remains a serious question of whether states could outlaw weapons like AR-15s. Even if the Supreme Court upheld such a ban, there are over eight million AR-15s in private hands, and a wide variety of guns with equal or higher firepower.

Then there is the problem that most gun deaths involve a single round fired by someone into themselves rather than into others. In 2017, six out of 10 gun deaths were suicides. Less than 40 percent were intentional murders, and the remaining gun deaths in the country were accidental or law enforcement shootings. While gun suicides reached their highest recorded level in 2017, nonsuicide deaths that involve guns have been declining and stand significantly lower from its high point in 1993.

While the other candidates on the debate stage forced Sanders into a rare flip on his vote to protect gun manufacturers from lawsuits, it was another example of a misleading promise. I actually opposed the 2005 bill that protected gun manufacturers and sellers from lawsuits because it was unnecessary and because I generally oppose legislation that limits tort liability. The Protection of Lawful Commerce in Arms Act, however, was not the sweeping immunity claimed by Biden and other candidates.

It barred liability for injuries due to the fact that firearms were later used by criminals. The bill saved the industry some litigation costs, but the industry would have prevailed in such actions anyway if they were tried. Product liability and tort actions against manufacturers have uniformly and correctly been rejected by the courts. Guns are lawful products, and holding companies liable for later misuse of such products is absurd. You might as well sue an axe manufacturer for the Lizzy Borden murders.

Thus, even if you remove immunity protections, ban certain magazines or devices, require background checks, or even ban a couple weapon types, the reduction in gun deaths would not likely fall significantly. Individuals still would have a constitutional right to possess guns. Moreover, the vast majority of guns would remain unaffected. That does not mean we should not try to reduce those fatalities or pass these measures. Any saved life is worth the effort. But candidates are misleading voters in suggesting that, if elected, they can dramatically impact the numbers of these cases.

Of course, none of that would make for a memorable debate moment for any of the candidates. Biden would be less than riveting if he glared into the camera and poked a figurative National Rifle Association in the chest while saying he would take them on and “marginally reduce the minority of deaths associated with nonsuicidal gun incidents.”

That is the reason why there are lies, damned lies, statistics, and presidential debates.

*  *  *

Jonathan Turley is the Shapiro Professor of Public Interest Law at George Washington University. You can follow him on Twitter @JonathanTurley.

Former FBI attorney Lisa Page is spitting mad after a dramatized reading of text messages between her and former FBI agent Peter Strzok was performed at the Conservative Political Action Conference (CPAC) near Washington.

Page and Strzok famously sent anti-Trump, pro-Clinton text messages to each other while they were spearheading separate investigations into each 2016 presidential candidate. The two were also having an affair at the time – which has resulted in President Trump frequently mocking their tryst at rallies with full-on theatrics.

Here are highlights of stars Dean Cain and Kristy Swanson performing it in September (longer version here).

And after a Washington Post Op-Ed revealed that President Trump met with the cast and crew of “FBI Lovebirds: Undercover” the day before CPAC, Page raged on Twitter – quoting the Post: “More than three years later, long after his election victory, Donald Trump is still obsessed with two officials who did their jobs while personally not liking him. They are still the stars of Trump rallies, where the president performs their exchanges, grotesquely.”

More than three years later, long after his election victory, Donald Trump is still obsessed with two officials who did their jobs while personally not liking him. They are still the stars of Trump rallies, where the president performs their exchanges, grotesquely. https://t.co/6E76hpKi9N

— Lisa Page (@NatSecLisa) March 1, 2020

Efforts to mock the pair arguably reached a new level at CPAC. The skit where the texts were dramatized was performed by actors Dean Cain, who once portrayed Superman on television, and Kristy Swanson, star of the 1992 film, “Buffy the Vampire Slayer.” The effort was written and produced by Phelim McAleer and Ann McElhinney.

“We met the president of the United States today in the Oval Office for 40 minutes,” McElhinney told the conference during a Q&A session after a performance. “He loves the play.”

“He said he wants to play a part,” added Swanson. –Bloomberg

Page raged on MSNBC last December, saying that Trump had performed a “vile, sort of simulated sex act” about her and Strzok.

Authored by Julianne Geiger via OilPrice.com,

As the World Health Organization on Friday upgraded its global risk assessment for the coronavirus to “very high”, anxious oil markets are wondering when might be a good time to panic about the oil demand and its effect on inventories, investment dollars, and ultimately, oil prices.

Now could be as good of a time as any.

Where We Stand

So far, the coronavirus has infected more than 80,000 people worldwide, claiming nearly 3,000 lives. It has spread to 49 different countries in just a few short weeks, and continues to disrupt airline travel on a massive scale. In California, one possible case of community transmission reared its head—bringing awareness of what the virus can do to a whole new level.

And make no mistake, there is more pain coming.  

Already, COVID-19 is disrupting manufacturing and industrial output, specifically in China, and the FDA said this week that the world is experiencing its first drug shortage from these coronavirus-induced manufacturing disruptions.

China’s massive oil refiners have felt the pain too, scaling back their petroleum products output, resulting in a big gaping hole in the demand side of the now precarious supply and demand equation for crude oil. Some suggest that China’s fuel demand now has a 4-million-barrel-per-day hole, and China’s imports of crude oil is expected to have dropped by 160,000 bpd in February. March may be worse, if Saudi’s oil exports to China next month are any indication.

This decreased fuel demand has caused at least one trading arm of independent Chinese refiner Tianhong Chemical Co to go into receivership this week after feeling the coronavirus pinch. While this is just a single instance of an oil trader going under due unfavorable market conditions courtesy of COVID-19, the development is cause for alarm. Is this just the first of many in China’s independent oil arena to go under?

This would spell disaster for China, and be painful for any of China’s many crude oil suppliers. After all, it is these independent refiners—the teapots—that have driven most of China’s oil import growth in recent years. Crude suppliers that would feel the pain of China’s refining industry meltdown would naturally be Russia, Saudi Arabia, Angola, and Iraq—who together represented 55% of all China’s crude oil imports as of 2018.

Saudi Arabia, for example, typically ships between 1.8 million bpd and 2 million bpd, but already for March the Kingdom is cutting its oil exports to China by 500,000 bpd as refineries are throttling output. 

But smaller suppliers, too, would be hit, particularly countries that ship most of their oil to China—countries like Iran, for example, which ships 50-70% of its oil to China.

Where We’re Headed

So things are bad, but surely the virus has run its course? 

Nothing could be further from the truth. US health officials warned Americans this week to roll up their sleeves, pull up their bootstraps and settle in, because the coronavirus is on its way.

“It’s not so much a question of if this will happen anymore but rather more of a question of exactly when this will happen,” Nancy Messonnier, director of the National center for Immunization and Respiratory Diseases said in a press briefing this week.

And if you want a preview of what’s to come, you only need to look at how major institutions such as the federal reserve are behaving.  

The Federal Reserve and other central banks are expected to act soon—as early as this weekend—to staunch the market bleeding in the financial markets. The Fed’s have suggested that they will indeed cut rates “if” a global pandemic were to develop.

About that “if” scenario, Moody’s Analytics yesterday suggested that the risk of the current coronavirus outbreak turning into a pandemic has actually doubled from 20% to 40%, calling their previous assumptions that COVID-19 would be contained to China as “optimistic”.

This pandemic, Moody’s said, would result in a global recession during H1 2020.

““The economy was already fragile before the outbreak and vulnerable to anything that did not stick to script. COVID-19 is way off script,” Moody’s said.

And Moody’s isn’t the only one who is rethinking their former optimism about the deadly virus.

The IMF is likely to downgrade its global growth projections due to the virus, according to an IMF spokesperson on Thursday. And no doubt, because lethal viruses tend to scare people away from mingling among the potentially sick at places such as malls and other public areas—a situation that naturally lends itself to serious stifling of economic activity. And all that economic stifling will have a profound effect on industry, and industry in turn will have an effect on oil demand. 

The IMF is now warning that there is the potential for greater economic fallout, and it is cutting its forecast for 2020 global growth by 0.1%.

Rystad, too, stepped into the doom-spreader game on Friday, warning that the virus outbreak could cut oil and gas industry investments by $30 billion and could delay oil platform deliveries slated for Asia by three to six months. Those hit hardest would likely be shale operators in the US, and offshore E&P companies, according to Rystad. 

Rystad doesn’t see the situation on the road to improvement. In fact, it sees the situation worsening in March, and affecting the entire global service industry.

Overall, travel restrictions, reduced industrial throughput, people staying home because they’re scared—these factors have not peaked, and when they do, they will dent oil demand even further. Already WTI has sunk below $45, with Brent below $50. And OPEC may lack the fortitude to cut enough production to offset the major demand losses.

It’s not out of the realm of possibility to suggest that more pain is on its way to the oil industry in the months that follow. The only question is, how painful will it be.

It was just Friday that Goldman finally gave up on its bizarrely optimistic global outlook that it had adopted in late 2019, and instead of seeing no rate cuts – or hikes – in 2020, the bank’s chief economist Jan Hatzius capitulated, and said that the Fed will likely cut at least three times in the first half to offset the global economic slowdown due to the coronavirus, late on Sunday, just 48 hours after its first rate forecast revision, Goldman has officially thrown in the towel on even a trace of optimism for the foreseeable future, and now expects not only the Fed to cut 4 times by the end of Q2, but also cautions of a a high risk that the easing it expects over the next several weeks could occur “in coordinated fashion, perhaps as early as the coming week“, which of course is disappointing for all those who were hoping the Fed would step in as soon as Sunday afternoon/evening.

In justifying the implosion of its outlook, Haztius writes that “on Friday morning, we downgraded our baseline view of global GDP growth in 2020 from just over 3% to around 2% on the back of developments related to the coronavirus, with weakness concentrated in the first half of the year. We also changed our Fed call to project 75bp of rate cuts by June, starting with a 25bp cut on March 18.“

This was on Friday morning. Since then, so over the weekend, it appears that newsflow has taken a decided turn for the worse, and as Goldman adds, “the news on the outlook has remained negative, with significant further increases in infections outside of China and an exceptionally weak China PMI release. Moreover, the statement by Fed Chair Powell on Friday afternoon that the Federal Reserve is “closely monitoring” developments and “will use [its] tools and act as needed to support the economy” strongly hints at a rate cut at or even before the March 17-18 FOMC meeting.”

Based on these developments, Goldman is making further adjustment to its Fed call and now projects a 50bp rate cut by March 18 followed by another 50bp of easing in Q2, for a total of 100bp in the first half. Which means that the US Fed Funds rate will be just above zero as the US enters the second half, and has a high chance of tipping negative around the time of the election. Hatzius explains:

The clear signal in Chair Powell’s statement has led the bond market to price in more than 25bp of easing, and the FOMC will not want the cut to come as a disappointment in the present situation.

But wait, there’s more: Goldman is now also forecasting rate cuts by most other G10 (and some EM) central banks, including a cumulative 100bp of cuts in Canada, 50bp in the UK, Australia, New Zealand, Norway, India and South Korea, and 10bp in the Euro area and Switzerland. The chart below shows Goldman’s new central bank forecasts along with market pricing as of Friday’s close.

So does 4 rate cuts seem excessive? Not at all, and in fact Goldman even says that relative to some of its new policy rate forecasts, “the risk is on the downside, at least in terms of timing.”

Specifically, we see a high risk that the easing we expect over the next several weeks occurs in coordinated fashion, perhaps as early as the coming week. Chair Powell’s statement on Friday suggests to us that global central bankers are intensely focused on the downside risks from the virus. We suspect that they view the impact of a coordinated move on confidence as greater than the sum of the impacts of each individual move. If a coordinated move does occur, we think some central banks for which we are projecting a first 25bp cut in our new baseline forecast may well join the Fed in cutting by 50bp. This might apply to New Zealand and—if the move occurs very soon—Australia. While it is a close call, our baseline is that the UK and Canada will both cut the policy rate by 50bp at their next meetings, even if a coordinated move does not occur very soon.

Finally to all those who point out the obvious, namely that monetary policy is ill-suited to address the impact of
the virus on the economy, and that it is really public health policy (and fiscal policy more broadly) that needs to act, Goldman agrees “but thinks that central bankers will still want to do their part” to support what Goldman erroneous calls the economy, when it clearly means the market, especially since there is not a trace yet of the US economy being impacted by the coronavirus, and last time we checked, the Fed is not a pre-cog cutting rates in advance of data developments. And while that obvious, what the Fed does do, is cut when stocks tumble, as they have now, and with the world habituated to a central bank bailout any time there is even a modest, 10% correction, this will be the first time we have a global coordinated central bank action in response to… the flu.

 

Authored by Lorraine Silvetz via LibertyNation.com,

As Coronavirus continues to make its way around the world, sickening and killing thousands, the U.S. government’s response to the crisis has become riddled with dissension between President Trump and the Democrats.

Trump requested $2.5 billion in funding from Congress to deal with the outbreak. Senate Minority Leader Chuck Schumer (D-NY), however, said that amount was too little as he put down the administration’s preparedness for a disease federal officials say could cause “severe” disruption to everyday life in the U.S.

“With no plan to deal with the potential public and global health crisis related to the novel coronavirus, the Trump administration made an emergency supplemental appropriations request on Monday,” Schumer said in a statement on Feb. 26.

“It was too little and too late — only $1.25 billion in new funding. For context, Congress appropriated more than $6B for the Pandemic Flu in 2006 and more than $7B for H1N1 flu in 2009.”

Donald Trump and Mike Pence

House Speaker Nancy Pelosi (D-CA) also insulted the president’s funding request, calling it “completely inadequate” and criticized the president for previously cutting funding to public health programs. She called the response “anemic.”

After Trump tapped Vice President Mike Pence to lead the Coronavirus response in the U.S.,  Democrats, including Rep. Alexandria Ocasio-Cortez (D-NY), attacked Pence for his handling of HIV while still the governor of Indiana. True to form, in the words of Obama’s former Chief of Staff, Rahm Emmanuel, Democrats “never let a good crisis go to waste.”

“As governor, Pence’s science denial contributed to one of the worst HIV outbreaks in Indiana’s history,” AOC tweeted.

“He is not a medical doctor. He is not a health expert. He is not qualified nor positioned in any way to protect our public health.”

Speaker Nancy Pelosi on Thursday said she spoke with Pence and voiced her concerns regarding Trump’s choosing him to spearhead the Coronavirus initiative. “We have always had a very candid relationship and, I expressed to him a concern that I had of his being in this position,” she said at her weekly press conference on Capitol Hill.

At Trump’s announcement of his position on Wednesday, Pence said his time serving as governor provided valuable training for this.

 “I know full well the importance of presidential leadership, the importance of administration leadership, and the vital role of partnerships of state and local governments, and health authorities in responding to potential threats and dangerous infectious diseases,” the vice president said.

Pence announced the appointment of Debbie Birx, a medical doctor and HIV and global health expert, as the “White House Coronavirus Response Coordinator.” She had previously been appointed by President Obama to the position of U.S. Global AIDS coordinator and confirmed by the Senate.

Presidential candidates didn’t hesitate to jump on the Coronavirus bandwagon declaring how they would respond to the outbreak.

“Like so much else, the Trump administration’s bungled response to the coronavirus outbreak is a mess,” Sen. Elizabeth Warren (D-MA) tweeted. 

“As president, I will lead a competent administration prepared to combat outbreaks—because our public health, economy, and national security depend on it.”

Mike Bloomberg

Former New York City Mayor Mike Bloomberg also joined the clamor of Trump insults regarding his approach to the coronavirus.

“I led NYC through its recovery after 9/11 and the financial crisis,” the billionaire tweeted Wednesday.

“We faced health epidemics and weather emergencies. The key to leading in a crisis like the coronavirus is sharing the facts, demonstrating control and trusting the experts. Unfortunately, not Trump’s strong suit.”

Trump said that Democrats and the media are playing up the Coronavirus threat for political gain, as he sought to ease fears about the virus this week both in his Wednesday press conference and in public appearances during his trip to India and on Twitter.

And it turns out the majority of Americans have faith in Trump to handle it…

A Poll in today’s New York Post says that 77% of “U.S. adults have confidence in their government’s ability to handle the Coronavirus (Number One), compared to other health threats.” 64% for Zika, 58% for Ebola. Others way down on list. Our professionals are doing a great job!

— Donald J. Trump (@realDonaldTrump) March 1, 2020

It is clear that the jury’s still out regarding how malignant Coronavirus will be both in the U.S. and around the world. Some experts estimate the mortality rate is 20 times higher than that of the seasonal flu. And while the seasonal flu kills roughly 35,000 Americans a year, if the coronavirus infects half the U.S. population, the 2% mortality rate still means 3.3 million American lives lost. Is Trump being misled by some of his advisors as to the magnitude of the coronavirus threat?