A major airport in Atlanta has admitted that neither its own officials, nor the Department of Homeland Security are screening travellers arriving from Italy or South Korea, two countries where the coronavirus has hit the hardest outside of China.
Hartsfield-Jackson Atlanta International Airport in Atlanta, Georgia announced that while the CDC has demanded screening of passengers from China and Iran, no such screening is taking place for those coming in from Italy/South Korea, “because those countries are doing exit screenings.”
As per the CDC, In the US, airports are conducting entry screening for travelers from China and Iran.
People aren’t being screened when they arrive from Italy/South Korea, because those countries are doing exit screenings.
For more info, please visit: https://t.co/2dgrl0KFhr *NA
So, essentially, officials in the US are relying on the word of their foreign counterparts that sufficient screening is happening before people leave.
This jives with reports from those entering the US after returning from Italy, confirming that they were not stopped or screened.
Italy was yesterday placed on complete lockdown after deaths increased by nearly 60 percent overnight. From today, the movement of Italy’s population of 60 million has been severely limited by the government there, with travel only being permitted for “urgent, verifiable work situations and emergencies or health reasons”.
In South Korea there are almost 8000 cases of infections.
On Friday, President Trump told the media that “The tests are all perfect”:
“The [coronavirus] tests are all perfect. Like the letter was perfect. The transcription was perfect. This was not a perfect as that, but pretty good.” — is Trump referring to the transcript of his phone call with the Ukrainian president here? pic.twitter.com/FU5XxPTu7Z
Nearly $1 out of every $10 being spent to fund the global response to the new coronavirus outbreak is coming from private donors, according to a new tracking system put together by the Kaiser Family Foundation. That adds up to more than $725 million coming from non-profits, businesses, and foundations.
The Kaiser Family Foundation, a non-profit global health policy think tank and information center, put together this database and released it today to serve as a resource to show where money is coming from and going to in the global effort to fight the spread of the new coronavirus, called COVID-19.
The total that has been spent so far is $8.3 billion, which means the vast majority of spending has come from government sources. The top spender is the World Bank, which has outspent everybody else to the tune of $6 billion and has prioritized that spending in the poorest countries with the highest risk.
The U.S. government has given $1.285 billion to other countries. An important caveat: This database does not show a government’s domestic spending to contain and fight COVID-19 within its own borders. This is all about the international effort.
Unsurprisingly, the largest private donor is Tencent, the massive Chinese tech company that pretty much operates the country’s entire internet social structure and is worth more than $500 billion (in U.S. dollars). Tencent has donated $214 million towards containment efforts in China. Alibaba, the massive Chinese e-commerce company, has donated $144 million.
Here in the United States, the Bill and Melinda Gates Foundation is getting attention for its $100 million in total donations and its direct efforts to facilitate faster coronavirus testing and the development of potential treatments. It’s the largest U.S. private donor currently, but it’s not the only one. Google, Caterpillar, Mastercard, General Motors, and several corporations that run resorts and hotels (like MGM Resorts International) are contributing anywhere from hundreds of thousands to millions of dollars.
Most of the money right now is focused on assisting China, but it seems likely that as the coronavirus spreads we’ll see donations spread to other countries. The Kaiser Family Foundation also acknowledges that its figures are based on public reports of private donations. There may be other private donors that Kaiser has missed. The chart lists all of its sources.
Looking at the private donor list, it seems obvious why they’re donating to China. All of them have huge customer bases there, particularly the Las Vegas resort chains. They have a huge stake in making sure consumers of their goods and products don’t die off. That’s a great thing about capitalism—it creates incentives to assist in the fight against large scale crises.
Read the list here. It will be updated as the Kaiser Family Foundation hears of new donors, both government and private.
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Plunge Protection Team Holds “Market Resilience” Call After Monday’s Market Crash
The last time Treasury Secretary Steven Mnuchin had a phone call with the President’s Working Group on Financial Markets, better known as the Plunge Protection Team, was on Dec 24, 2018, or the day which has since become better known as the Christmas Eve massacre and which just happened to be the low of the Q4 2018 mini bear markets. It spawned a tremendous rally which culminated in a full year return for 2019 of nearly 30% with zero earnings growth.
We bring this up because moments ago, moments ago we learned that in the past day, there was another phone call with the participants of the plunge protection team, which included Mnuchin, Fed Chairman Powell, New York Fed President Williams, as well as the heads of SEC, CFTC, OCC and FDIC, and during which “market conditions and resilience”, “economic disruptions” and “virus impact” were all discussed:
The regulators “shared updates on the resilience of the markets and the economic impact,” of the virus, the Treasury Department said in a statement according to Bloomberg, and while the details of the call or its conclusion have not yet been leaked, one can imagine what the topic was on the day the market suffered its biggest crash since the financial crisis.
Curiously, while the market had ramped to session highs earlier on a report that Trump had a great meeting with Senators, and there was “unity in the GOP party”, the PPT phone call report nudged markets off session highs, perhaps because it means – once again – that a fiscal stimulus agreement remains far away.
“It’s Really Shaken My Confidence” – Robinhood Reportedly Maxed Out Credit Line Ahead Of Outages Crisis
Millennial ‘get rich quick’ free trading app Robinhood has been making headlines all week and not for the right reasons. Today, things may have got worse as Bloomberg reports that, according to sources familiar with the matter, Robinhood Markets, Inc. maxed out its credit line of $200 million right before its mobile trading app experienced two separate outages in March.
While the firm had declined to comment on what caused the outages, it quickly responded with regard its capital position:
“Our capital position remains strong,” Robinhood Markets said in an email statement, indicating the decision to draw on its entire credit line was predated and unrelated to the latest interruptions.
“We determined it was prudent to draw on our credit line during the week of Feb. 24 in light of market volatility. That capital was returned in full last week.”
However, if Robinhood maintained a robust balance sheet, the company wouldn’t need to be maxing out its credit line:
“Companies don’t tap their credit line unless they need to,” said David Ritter, an analyst at Bloomberg Intelligence.
When companies do, it’s “perhaps not a good signal with regard to their cash burn, which could make creditors nervous.”
The trading app experienced two outages, one on Mar. 2, and another on Mar. 9. In both instances, there were reports that users couldn’t trade equities, options, and cryptocurrencies as the US cash session began.
Fintech startups can risk eroding customer trust with outages, said John Bartleman, president of TradeStationGroup Inc., a rival online trading firm.
“If you’re a smaller fintech startup, your reputation is everything,” he said.
“If you can’t get in, you lose all trust in a brand.”
A growing number of Robinhood users on social media have been reporting trouble with closing their accounts. They’re also criticizing the $75 fee associated with the transferring to another platform.
Pankaj Sharma, a New Jersey IT professional with tens of thousands of dollars in a Robinhood account, told Bloomberg that when the app crashed on Mar. 2, he received zero communication from the company about the outage. Sharma is now considering switching to another brokerage house after his disgust with the app.
“It’s really shaken my confidence,” he said.
Robinhood, which was founded in 2013 by Vlad Tenev and Baiju Bhatt, pioneered commission-free trading, a move that’s since been copied by larger online brokers including Charles Schwab Corp. The startup has attracted 10 million users and is now backed by venture capital firms including Index Ventures, Andreessen Horowitz and Sequoia.
But, as the stock market implodes, the IPO market goes bust, and credit markets freeze, Covid-19 is forcing investors to reprice assets for lower growth, and it should be noted that Robinhood’s latest private round valuation in May 2018 valued the company at $5.6 billion.
The monumental mistake of the Federal Reserve cutting rates this week can only be understood in the context of the rising God’s complex of central planners. An overwhelming combination of ignorance and arrogance.
Less than a week ago, several members of the Federal Reserve board reminded – rightly so – that cutting rates would not have a significant impact in a supply shock like the current one. We must also remember that the Federal Reserve already cut rates in 2019 and inflated its balance sheet by 14% to almost all-time highs in recent months, completely reversing the virtually nonexistent prior normalization. Only a few days after making calls for prudence, the Fed launched an unnecessary and panic-inducing emergency rate cut and caused the opposite effect to what they desired. Instead of calming markets, the Federal Reserve 50 basis points cut sent a message of panic to market participants. If the jobs and manufacturing figures were better than expected, and the economy is solid with low unemployment, what message does the Fed transmit with an emergency cut? It tells market participants that the situation is much worse than it seems and that the Fed knows more than the rest of us about how dire everything can be. A communication and policy mistake driven by an incorrect diagnosis: The idea that the market crash would be solved with easy monetary policy instead of understanding the impact on stocks and growth of an evident supply shock from the coronavirus epidemic.
There is no lack of monetary stimulus in the economy. Global money supply has soared to $81 trillion, an all-time high, in the middle of the epidemic, most leading economies have cut rates and implement zero and negative real rates. In fact, major central banks were already injecting more than $150 billion a month (PBOC, ECB, Fed, etc.) into a doped economy long before the coronavirus was even in the news.
A supply shock is not solved with demand-side policies. Governments and central banks will generate a deflationary crisis by adding fuel to bubbles and increasing overcapacity in an already bloated economy only to create an artificial boost to GDP.
Cutting rates, printing money and increasing deficits is the wrong response to a viral short-term shock. Furthermore, if these massive demand-side programs are launched aggressively, the result in the medium term is a new crisis. We already saw it in 2009 with the misguided response of the eurozone, spending almost 3% of GDP in white elephants and adding debt to a financial credit crunch problem. It triggered a worse crisis afterward.
Central banks were already injecting more than 150 billion dollars a month into a doped economy
No economic agent is going to consume more or invest more because of an interest rate cut. Banks are not going to lend more into a supply shock and even less at lower rates. However, central banks should consider the massive risk in disguise. With $14 trillion in negative-yielding bonds and $81 trillion in global money supply, the combination of panic-induced fall in asset price and massively leveraged bets can generate a rapid financial shock. We must remember that the risks for dangerous corporate loans hit an all-time high, according to Moody’s, with 87% of all leveraged loans — one of the riskiest types of corporate debt — issued with “covenant-lite” clauses. This means almost no protection for investors.
The error of taking extreme monetary measures in an epidemic is to assume that the problem of the economy is that there is an excess of unjustified savings and lack of demand that must be created artificially via interventionism.
Interest rates are already disproportionately low. To think that companies are going to invest more if rates are cut even further is simply ridiculous. The vast majority of long-term investment decisions from citizens and businesses do not change due to short-term rates. Demand for credit does not increase in the face of an epidemic and a supply shock. However, lower rates are likely to generate two dangerous side effects: A disproportionate increase of refinancing of already non-performing loans and a credit crunch in the profitable economy. Banks will be forced to refinance and keep bad existing loans as well as finance governments at ultra-low rates while they will also see no alternative but to cut loans to new customers and small enterprises.
These rate cuts disproportionately benefit government reckless spending and existing indebted sectors, no matter how unprofitable, at the expense of small and medium enterprises, families and productive sectors, that will suffer the credit crunch and the tax increases that will inevitably follow the government binge on white elephants and unnecessary spending.
The absolute imprudence and irresponsibility of maintaining ultra-expansive policies and deficit spending in a growth period come to bite now. Now central banks and governments know they have no effective tools that may increase confidence. It is in cases such as this epidemic that the irresponsibility of the European Central Bank is seen more clearly when it kept negative rates increased the purchase of already massively inflated sovereign bonds, buying billions of government bonds with yields that are absurdly and completely disconnected from reality. And it is also at times like these that the irresponsibility of increasing deficits and spending in a growth period becomes clearer. Governments and central banks have exhausted all fiscal and monetary tools to generate a perceptible effect.
The obsession to maintain and increase the bubble of sovereign bonds in times of growth has led central banks to a dead end. They are now forced to take even more useless measures and, on top of that, the confidence of financial agents diminishes.
The failure of demand-side policies was already evident in 2019 with the indebted deceleration. Now, central planners will do the same again. Fail, repeat.
It has been an absolute imprudence to maintain ultra-expansive policies in a growth period
The US 10-year bond yield at 0.73% is not a sign of confidence or success of government policies, but an unequivocal sign of fear. Eurozone yields at negative levels is not a sign of strength, but a bubble.
Of course there are measures that can be taken to reduce the effects of coronavirus. Postpone the payment of taxes to companies in difficulty, reduce bureaucratic burdens, open cooperation between health and scientific organizations, facilitate alternative supply chains lifting trade barriers and tariffs, and provide working capital financing to SMEs at rates that already existed for governments and zombie companies before this unneeded cut. Supply measures to supply shocks. Spending on white elephants to inflate GDP, cut already obscenely low rates and buying insanely expensive bonds is not only a bad response, but it is also the recipe for a guaranteed stagnation spiral.
Some tell us that the monetary helicopter must be imposed because Hong Kong has done it. I cannot believe it. Hong Kong has huge reserves, a gigantic financial balance and can afford an expense – which in any case will be useless – of 6 or $7 billion. However, not even that experiment is going to get Hong Kong out of a problem that was already evident before the coronavirus, due to social protests, nor will it work in the eurozone.
The idea that if an insane monetary or fiscal policy does not work it is because it was not large enough should have already been dismantled. Repeating the most recurring Keynesian excuses of “it was not enough”, “it would have been worse” and “it must be repeated” is already a joke, but generating a recession implementing headline-grabbing spending and debt measures is irresponsible.
Dr. Amesh Adalja, an expert in infectious diseases, pandemics and biosecurity at the John Hopkins Hospital explained this week that governments generate greater impacts on the economy than the epidemics themselves making wrong decisions to give the impression that they are doing their job. At a conference this week, he explained that “the virus will be endemic and seasonal, given its resemblance to other coronaviruses” that the “mortality rate is low and I would expect it to be reduced once the generalized tests for the detection are in place”. “The severity of the virus is very low, but governments will take containment measures such as canceling events to prevent hospitals from collapsing, and these measures will not be effective in containing it,” he said.
It is possible to get a vaccine in a period of about a year, and in the coming months, we could see several therapeutic treatments available, according to the expert. The only thing we can ask from governments and central banks at this point is to do everything possible to avoid grandiose gestures to “calm down”, because the result will likely be the opposite .
Deficit increases under the excuse of the coronavirus and raising already huge current expenses can throw us into a recessionary and deflationary spiral in months. An increase in artificially created excess capacity would be added to a punctual supply shock, generating a double negative effect in the long term.
When a global short-term supply problem is generated, increasing current expenditure and adding excess capacity in sectors of very low productivity is lethal in the medium term. The financing capacity of the economy is squandered between errors in demand-side policies and rising automatic stabilizers. The latter will soar anyway in economies that are already heavily indebted and doped with low rates. More current spending, in this case, will be less.
InfoWars founder and America’s leading conspiracy theorist Alex Jones was reportedly arrested for a DWI in Travis County, Texas, where he’s lived for decades in the state’s capital city of Austin.
Jones was booked by State Police in the early morning hours of Tuesday. The Austin Statesman reported that he was booked at 12:37 am.
The driving while intoxicated charge is a Class B Misdemeanor, and the 46-year-old Jones was released shortly after 4 am when he made the $3,000 bail. So long as he doesn’t have a long history of DWIs, he likely will receive community service, probation, alcohol abuse classes or a fine in exchange for the charges being dropped.
Jones became a household name four-plus years ago when President Trump praised him for his loyal coverage and excellent reputation, a comment that seemed to enrage Trump’s political opponents. For Jones, a spate of personal and professional problems soon emerged, culminating with last year’s ruling against Jones in a lawsuit filed by the parents of children killed during the Sandy Hook shooting, which Jones once decried as a hoax.
Over the years, he and his company Infowars have been de-platformed by every major social media company (FB, Twitter etc) as well as YouTube and even the Apple App Store.
Nearly 40,000 Americans are killed in car accidents every year, many of them involving at least one driver who was over the state legal limit. Hopefully, if this is a bigger problem than just a momentary, idiotic lapse, Jones can get the help he needs.
Stocks Jump After Mnuchin Says There Is “Bipartisan Urgency” For Fiscal Package, Italy Stimulus May Reach €16BN
After dipping in the red earlier after reports that a US fiscal package is nowhere near ready, stocks have burst higher after earlier vague news of a $300 billion proposal for a fiscal package, and more recently, a Bloomberg report that Italy’s government is considering raising its deficit as much as just under 3% of GDP, which would grant leeway for a stimulus package of as much as €16 billion. Overnight reports speculated that the budget deficit would rise between 2.2% and 2.8% of GDP, indicating that Italy is hoping to push through as much stimulus as it can get away with under the EU’s framework.
Separately, and further fueling the rally, Treasury Secretary Mnuchin said after meeting House Speaker Pelosi, that there is Bipartisan urgency to pass a relief package, adding that there are some things Treasury can do on its own to provide relief which are being explored.
Finally, wires reported that Senator Shelby said options were being mulled to buffer US oil producers could include longer-term loans.
As noted above, this barrage of favorable stimulus news and speculation has helped stock ramp almost back to session highs, with the Dow trading over 600 points higher at last check.
Johns Hopkins Doctor Warns, ‘What Happened In Wuhan Could Happen Here’
Renowned Johns Hopkins surgeon, researcher and policy expert Martin Makary told CNBC on Tuesday morning that the virus outbreak in Wuhan, China, could be easily replicated across America.
“What happened in Wuhan could happen here. Why do we think otherwise?” Makary said.
Makary said the immune system of a typical American is “not stronger than the Chinese immune system,” adding that “viruses don’t care about politics and they don’t care about location.”
With 750 cases of Covid-19, the airborne virus is quickly spreading across the US, now seen in more than 30 states, with officials in several states declaring a state of emergency. The lack of test kits, limited travel restrictions, and no vaccine for 12-18 months suggest that the map below will get a lot redder in the coming weeks:
Makary said, “We need to tell people right now to stop all nonessential travel. I feel strongly about that,” adding he does not “like the idea of talking about contingency plans, but we’ve got to start making these plans.”
What’s becoming increasingly evident is that America isn’t ready for a virus outbreak. He said the virus could cause havoc on the health care system for upwards of three months. “If we get 200,000 critical care cases, we’re going to be overrun,” he warned. “So we need to do more” to prepare for the worst.
President Trump is well aware of the present situation and how the virus is crashing the stock market. He said Monday, “nothing is shut down, life and the economy go on.” But Trump’s optically pleasing headlines are much different than what his Secretary of Health and Human Services, Alex Azar, is saying, who warned that “everyone should take precautions regarding the virus.”
The first indications that the US could be transforming into a Wuhan-like scenario are in areas such as King County, Washington; Santa Clara, California; Los Angeles; and the Tri-state area, where confirmed cases have been soaring in the last few days. Without travel restrictions and the lack of test kits, the virus is a perfect storm that could lead to thousands of more infected in the weeks ahead.
Nearly $1 out of every $10 being spent to fund the global response to the new coronavirus outbreak is coming from private donors, according to a new tracking system put together by the Kaiser Family Foundation. That adds up to more than $725 million coming from non-profits, businesses, and foundations.
The Kaiser Family Foundation, a non-profit global health policy think tank and information center, put together this database and released it today to serve as a resource to show where money is coming from and going to in the global effort to fight the spread of the new coronavirus, called COVID-19.
The total that has been spent so far is $8.3 billion, which means the vast majority of spending has come from government sources. The top spender is the World Bank, which has outspent everybody else to the tune of $6 billion and has prioritized that spending in the poorest countries with the highest risk.
The U.S. government has given $1.285 billion to other countries. An important caveat: This database does not show a government’s domestic spending to contain and fight COVID-19 within its own borders. This is all about the international effort.
Unsurprisingly, the largest private donor is Tencent, the massive Chinese tech company that pretty much operates the country’s entire internet social structure and is worth more than $500 billion (in U.S. dollars). Tencent has donated $214 million towards containment efforts in China. Alibaba, the massive Chinese e-commerce company, has donated $144 million.
Here in the United States, the Bill and Melinda Gates Foundation is getting attention for its $100 million in total donations and its direct efforts to facilitate faster coronavirus testing and the development of potential treatments. It’s the largest U.S. private donor currently, but it’s not the only one. Google, Caterpillar, Mastercard, General Motors, and several corporations that run resorts and hotels (like MGM Resorts International) are contributing anywhere from hundreds of thousands to millions of dollars.
Most of the money right now is focused on assisting China, but it seems likely that as the coronavirus spreads we’ll see donations spread to other countries. The Kaiser Family Foundation also acknowledges that its figures are based on public reports of private donations. There may be other private donors that Kaiser has missed. The chart lists all of its sources.
Looking at the private donor list, it seems obvious why they’re donating to China. All of them have huge customer bases there, particularly the Las Vegas resort chains. They have a huge stake in making sure consumers of their goods and products don’t die off. That’s a great thing about capitalism—it creates incentives to assist in the fight against large scale crises.
Read the list here. It will be updated as the Kaiser Family Foundation hears of new donors, both government and private.
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The Levered Oilpocalypse: Two 3x Levered Oil Exchange-Traded Products To Liquidate
In the aftermath of the February 2018 Volmageddon, aka VIXtermination event, where VIX exploded from 17.3 to 37.3 in one day as several levered inverse VIX ETNs were caught in a gamma feedback loop that forced them to buy more VIX the higher VIX rose, eventually pushing the fear index above 50 and resulting in 80%+ losses among the inverse VIX ETNs, the most notable outcome was that the retail darling VIX ETN, the XIV, suddenly triggered its “termination event” clause after it suffered heretofore unthinkable losses of over 80% in one day.
Two years later the exact same “termination” fate has befallen at least two levered oil exchange traded products.
As Bloomberg reports today, the spectacular crash in oil prices “claimed its first victims among exchange-traded products: Two highly leveraged instruments in Europe will shutter as a result of the maelstrom.”
The WisdomTree Brent Crude Oil 3x Daily Leveraged and the WisdomTree WTI Crude Oil 3x Daily Leveraged products will both be terminated “due to an extreme adverse move in oil futures,” according to a notice on the issuer’s website.
Just like the XIV and its levered peers, the oil-linked products, which hold a combined $10.3 million in assets, relied on swaps to deliver three times the daily move in crude prices. Those swaps have been closed thanks to the recent price collapse, and the funds themselves will be terminated “as soon as it is practically possible,” the notice states.
Oil plunged the most in almost three decades this week as Saudi Arabia and Russia vowed to pump more in a battle for market share just as the coronavirus spurs the first decline in demand since 2009. Futures slumped by about 25% in New York and London on Monday, while 3x levered ETPs such as the ones above were effectively wiped out.
Unlike the Wisdomtree ETPs, several U.S.-listed products narrowly escaped liquidation the same day, with UWT, or the VelocityShares 3x Long Crude Oil ETN plunging as low as 73% on Monday, just shy of its termination trigger of 75%.
SAVED BY THE BELL: $UWT just barely avoided triggering a termination event. It’s INAV ended day at -73.8%, just shy of the -75% req for termination. A couple more minutes and it was prob curtains, but was stopped (saved) by the 2:30pm Nymex futures close. pic.twitter.com/URU0WoG8QD
“The sudden crash in oil has put UWT in the danger zone of getting XIV-ed today,” said Bloomberg ETF analyst Eric Balchunas. “A termination of the note would really just add insult to injury given how severely painful this trade is right now — and has been all year.”
Among the other 3x levered oil ETN which narrowly missed liquidation, were GUSH, GASL and OILU:
Ironically, as Balchunas noted earlier today, after its near-death experience, the $UWT took in $75m in flows yesterday and was up 11% after being an inch from death, “it could literally hear the bullet whizzing past its head.”
UPDATE: $UWT took in $75m in flows yest and is up 17% in pre-market after being an inch from death, it could literally hear the bullet whizzing past its head.. https://t.co/PgCHZH81Zv
