Category: zerohedge

Summary:

• Japan PM Abe says world “not ready” to hold Olympics
• Australia and Canada pull athletes from the games
• Spain reports 26% jump in deaths on Sunday
• Largest 2-day jump in global cases reported over the weekend
• Spain follows Italy by extending quarantine
• 1 in 3 Americans begin Monday under lockdown
• India shutters domestic transit even as ‘official’ cases remain low
• Trump sends National Guard troops to New York, California & Washington
• Fed delivers latest bazooka blast with another massive monetary stimulus
• Senate holds second stimulus vote
• Amazon doubles workers overtime pay

*  *  *

For millions of Americans, the full weight of the novel coronavirus outbreak, and its ensuing crisis, finally became apparent over the weekend as governors from New York, to Ohio, to Delaware warned that all “non-essential” employees will soon be required to shelter in place.

Additionally, though hundreds of thousands of cases around the world likely remain undiagnosed, global health authorities revealed on Monday that the acceleration in new cases over the last 48 hours was the fastest on record, according to the FT’s calculations: According to the paper, the total number of confirmed cases around the world increased by a record magnitude this weekend as the situation worsened, particularly in the US.

Health authorities reported an additional 61,872 cases over the 48-hour period, while the number of fatalities increased by 3,260 to 14,748, the largest two-day jump in new cases on record.

The US was the hardest hit on Sunday, adding 9,339 cases, nearly 4,000 more than the 5,560 new cases that Italy added. For the first time in nearly 2 weeks, Italy saw a slowdown over the weekend. In Spain, meanwhile, the situation has been the opposite: 450 people have died in Spain over the past 24 hours after contracting the coronavirus, while there has been a surge in intensive care patients.

The ministry of health in Madrid said on Monday that 2,172 have died, a 26% increase on Sunday’s total of 1,720. Spain, with more than 33,000 infected, is the worst-hit European country after Italy.

Across the US, the scale of the crisis was finally laid bare when the total number of confirmed cases surged to almost 30,000 and New York emerged as an international hotspot. As of Monday morning, the total number of cases around the world had climbed to 349,211, per Johns Hopkins.

During a press conference on Sunday, New York State Gov. Andrew Cuomo warned that he expected up to 80% of the state’s population to ultimately contract the virus, and told residents to brace for disruptions to daily life that could last for as long as nine months.

As more governors ordered their citizens to stay home beginning on Monday, Reuters counted that roughly one in three Americans is now under orders to stay home to slow the spread of the coronavirus pandemic as Ohio, Louisiana and Delaware became the latest states to enact broad restrictions, along with the city of Philadelphia, according to Reuters.

We reported last night that Ohio, Louisiana and Delaware are now the latest states to enact broad restrictions (along with the city of Philadelphia), joining New York, California, Illinois, Connecticut and New Jersey, home to 101 million Americans combined.

Ohio’s order will go into effect at midnight EDT on Monday and stay in effect until April 6. Louisiana’s order goes into effect at 5 pm CDT on Monday and lasts through April 12. Delaware’s order begins at 8 am on Tuesday.

Texas’s Dallas County, home to more than 2.5 million people, and Philadelphia, with 1.6 million residents, told non-essential businesses on Sunday to close and residents to stay home.

In Kentucky, non-essential businesses must close by 8pm on Monday, but authorities stopped short of ordering residents to stay home.

The orders come as the US cracks 35k cases, leaving it on track to surpass other developed countries given the scope of its outbreak.

As the Empire State ramps up testing faster than many of its peers, thanks largely to the leadership of Gov. Andrew Cuomo, New York now comprises almost half of all diagnosed cases of COVID-19 in the US.

Source: FT

While confirming to the public that he had tested negative for the virus, Vice President Mike Pence said 254,000 Americans had been tested for the coronavirus as of Sunday, and that 10% were positive.

Source: Reuters

More news from the US: As more Americans prepare to rely on e-commerce to buy goods as traveling to the grocery store becomes taboo, Amazon is doubling overtime pay as the outbreak worsens, while other companies focus on mass layoffs. Although the Fed’s latest monetary bazooka blast has pushed futures back into the green, easing the pressure on lawmakers, another vote for the Senate’s $1 trillion-plus rescue package – the third bill to confront the outbreak.

Johns Hopkins is reporting more than 35,000 cases in the US, along with 417 deaths.

Last week, the New York Times reported that the virus total in India was surprisingly low, especially when factoring in the country’s endemic poverty and massive population. But as the country suspends public transit on Monday, hampering medical workers in their quest to get to work, many are beginning to wonder: If the situation in India is so optimistic, why is the government bothering with all of thee closures.

After a total suspension of services on Sunday, city buses began running again on Monday, but are only operating infrequent skeletal services.

“How are staff supposed to attend the hospital with no public transport,” said one doctor at a 595-bed private hospital in New Delhi.

“Hospitals are not run by doctors alone. Doctors all reached because they have their cars. But the electrician couldn’t reach because he didn’t have a scooter. All the staff nurses were calling saying, there is no bus how do we come?”

“Where was the planning for this?” the doctor asked.

It’s certainly curious…considering the country is also shutting down domestic air travel on Monday.

India, a country of 1.3 billion people, has only 425 “confirmed cases” of CV-19 and a handful of reported deaths.

But today they are shutting down domestic air travel.

All gov’ts are liars. Some lie more.#DontTestDontTell https://t.co/UcalVt1w50

— Ben Hunt (@EpsilonTheory) March 23, 2020

In other news, Australia joined Canada in withdrawing its athletes from the Tokyo 2020 Olympics, placing further pressure on the IOC to cancel the games. Japanese Prime Minister Shinzo Abe said Monday that the Tokyo Games “cannot be held” under the current circumstances.

Tokyo Olympic organizing committee President Yoshiro Mori said he supports the IOC’s decision to review plans to hold the Olympics.

“If I’m asked whether we can hold the Olympics at this point in time, I would have to say that the world is not in such a condition,” Abe told a parliamentary session, adding he hopes to hold talks with International Olympic Committee President Thomas Bach over the issue.

“It’s important that not only our country but also all the other participating countries can take part in the games fully prepared,” Abe said, according to Kyodo News.

Spain will become the next country to expand its lockdown for 15 days as deaths and confirmed cases in the country continue to soar, while the British government on Monday ordered 1.5 million people with serious health problems to self-quarantine at home for the next 3 months, the length of time during which PM Boris Johnson believes the UK can quash the virus is enough people follow the government’s guidelines.

Update: ignore all of the below, because moments ago, with futures near limit down, the Fed announced it would pursue an unprecedented open-ended QE, which helped push futures sharply higher and are now green on the session.

Bonds are bid across the board…

… and investment grade credit is soaring, as the Fed – after every bank demanding it do so – finally caved, and announced it would buy corporate debt.

Finally, with the Fed promising to print literally an unlimited amount of dollar, gold is finally soaring

 

* * *

Friday’s quad-witching and gamma-decay action was supposed to ease some of the insane market volatility hit late last week, but alas it was not meant to be, and after hitting a session hit of 2,499 on Friday, only to close at the lows, on Monday Emini futures tumbled limit down to start the session after Senate Democrats blocked a mammoth $1.8 trillion Republican stimulus package in a 47-47 vote, as a number of GOP senators were either sick with covid (such as Rand Paul) or in self-quarantine (Mitt Romney and others). Another vote was initially scheduled for 9:45am this morning (just after markets opened) but that was pushed back to noon, which means that the market will have be on pins and needles to see if and what kind of stimulus package passes, while also contemplating that there are now 345,289 global coronavirus cases and almost 14,924 death.

In light of all that it is perhaps somewhat surprising that futures actually managed to rebound from the -5% limit down and were last trading at 2,215, about 200 points above Goldman’s near-term price target of 2,000…

… even as the Bloomberg dollar index rebounded to all time highs as all the Fed’s attempt to ease the dollar funding shortage, and the $12 trillion dollar margin call, appear to have failed to ease the scramble for dollars.

“Further deterioration in the COVID-19 outbreak is severely damaging the global economy,” Morgan Stanley analysts warned on Monday. “We expect global growth to dip close to GFC lows, and U.S. growth to a 74-year low in 2020.”

The latest breakdown of cases is as follows (via RanSquawk):

• CHINA total cases 81,093 (prev. 81,054), death toll 3,270 (prev. 3,261).
• ITALY total cases 59,138 (prev. 53,578), death toll 5,476 (prev. 4,825).
• US total cases 35,070 (prev. 32,356), death toll 458 (prev. 414)
• SPAIN total cases 29,909 (prev. 25,496), death toll 1,813 (prev. 1,381).
• GERMANY total cases 26,198 (prev. 22,364), death toll 111 (prev. 84).
• FRANCE total cases 16,018 (prev. 14,459), death toll 674 (prev. 562).
• SOUTH KOREA total cases 8,961 (prev. 8,897), death toll 111 (prev. 104).
• SWITZERLAND total cases 7,806 (prev. 6,863), death toll 100 (prev. 80).
• UK total cases 5,683 (prev. 5,018), death toll 281 (prev. 233).
• NETHERLANDS total cases 4,204 (prev. 3,631), death toll 179 (prev. 136).
• CANADA total cases 1,470 (prev. 1,328), death toll 20 (prev. 19).

The panic quickly spread around the globe, with the Stoxx Europe 600 slumping led by health-care shares as the continent’s leaders scrambled to enforce more curbs on people’s movements and Italy began shutting most industrial production. Equities fell across most of Asia, where India’s benchmark plunged a record 13% while the rupee sank to the lowest ever amid moves to lock down widespread areas of the second-most populous country.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 5.01%, with New Zealand’s market shedding a record 10% as the government closed all non-essential businesses. Shanghai blue chips dropped 2.51%, though Japan’s Nikkei rose 2.0% aided by expectations of more aggressive asset buying by the Bank of Japan. In Australia, the S&P/ASX200 dropped 5.62% to take the index to a seven-year low.

UBS Australian head of equities distribution George Kanaan said global financial markets were currently gripped by fear, which seemed unlikely to ease any time soon, despite the co-ordinated efforts of governments and central banks around the world.

“I have been in the financial markets for 27 years and I have never seen anything like this,” he told Reuters by telephone from Sydney. “This is unprecedented in terms of fears and there are two elements driving that.

“First is that this involves masses of people. In the GFC, that was an event that occurred in the investment banks around the world, it didn’t involve people on the street. The second is that social media is helping to drive this fear and panic.”

Globally, analysts are dreading data on weekly U.S. jobless claims due on Thursday amid forecasts they could balloon by 750,000, and maybe by more than a million. U.S. stocks have already fallen more than 30% from their mid-February peak and even the safest areas of the bond market are experiencing liquidity stress as distressed funds are forced to sell good assets to cover positions gone bad.

In contrast to the response by authorities to the global health crisis, however, are calls from some on Wall Street to ease restrictions as soon as possible to give the economy room to recover.

“Extreme measures to flatten the virus ‘curve’ is sensible-for a time-to stretch out the strain on health infrastructure,” former Goldman Sachs Chief Executive Lloyd Blankfein tweeted. “But crushing the economy, jobs and morale is also a health issue-and beyond. Within a very few weeks let those with a lower risk to the disease return to work.”

Quoted by Reuters, E.L.&C. Baillieu financial advisor James Rosenberg said investors would remain cautious as a growing numbers of cities around the world entered lockdown. “The market is going to remain very volatile because nobody knows how to price a looming shutdown,” he said.

“The turning point will be a slowing in the rates of infection and we are probably weeks away from that happening – but it will happen with very tough social measures,” he said.

Elsewhere, Treasuries gained and core European bonds climbed. Yields on the benchmark U.S. 10-year note tumbled to 0.70% having dived all the way to 0.84% on Friday from a top of 1.28%.

In commodities, Brent crude extended losses after its 20% decline last week.

In New Zealand, the central bank announced its first outright purchase of government paper aiming to inject much-needed liquidity into the local market. In currency markets, the first instinct on Monday was to dump those leveraged to global growth and commodity prices, sending the Australian dollar down 0.8% to $0.5749.

Top Overnight News from Bloomberg

• On a weekend in which more than 2,000 people were killed by the virus in Italy and Spain, Germany banned gatherings of more than two people. The U.K.’s Prime Minister Boris Johnson threatened “tougher measures” unless British people stop ignoring calls to avoid social gatherings. Officials in Rome decreed a halt to almost all domestic travel, while Spanish Prime Minister Pedro Sanchez extended the state of emergency in his country for another two weeks. German Chancellor Angela Merkel put herself in quarantine as a precaution after coming into contact with a doctor who tested positive for the virus
• The Swiss National Bank appears to have waged the largest barrage of foreign exchange interventions in four years as amount of cash commercial banks hold with the central bank — called sight deposits — rose by 5.8 billion francs ($5.9 billion) last week, data on the SNB’s website on Monday showed
• The impact of virus on the Italian economy will be strong even as measures by the European Central Bank and European governments help limit the intensity and length of the slump, Bank of Italy chief Ignazio Visco and Prime Minister Giuseppe Conte said in separate interviews in La Stampa newspaper.
• Bank of France Governor Francois Villeroy de Galhau said Europe’s rescue fund should be activated to lend to states struggling with the coronavirus outbreak, a move that could pave the way for further sovereign bond purchases by the European Central Bank

Asian stock markets mostly traded with hefty losses amid further coronavirus-related disruptions and a rising death toll. As such, risk sentiment was spooked which was exacerbated as US equity futures hit limit down within a matter of minutes from the open to set the gloomy tone across the Asia-Pac region with ASX 200 (-5.6%) weighed heavily amid double digit losses across the big 4 banks and with NZX 50 (-7.6%) registering its worst intraday drop on record of more than 10% after the announcement of shutdown measures. Elsewhere, Hang Seng (-4.9%) and Shanghai Comp. (-3.1%) were lower as China conformed to the global coronavirus fears and after continued PBoC liquidity inaction. Nikkei 225 (+2.0%) bucked the trend on return from its extended weekend and with some finding comfort after Japanese PM Abe ruled out the cancellation of the Olympics but was instead open to a postponement, while SoftBank shares surged on the announcement of a JPY 4.5tln asset sale to fund a share buyback in which the Co. will retire 45% of stock. Finally, 10yr JGBs were higher amid the predominantly negative overnight risk tone and with the BoJ also present in the market today which includes unscheduled purchases of JPY 300bln in 3-5yr and JPY 500bln in 5yr-10yr JGBs.

Top Asian News

• Thailand’s Key Stock Index Plunges 8%, Triggering Trading Halt
• Hong Kong Bans Tourist Arrivals, Says Bars Can’t Serve Alcohol
• China Talks Up Post-Virus Rebound as World Economy Shuts Down
• Indonesian Stocks Hit Circuit Breaker Amid Spike in Virus Cases

Another detrimental start to the week for European equities (Euro Stoxx 50 -3.0%), as the negative APAC sentiment reverberated to Europe after US Senate failed to reach the required number of votes to pass its coronavirus bill, although Senate Majority Leader McConnel stated that a re-vote of the motion will proceed 15 minutes after the US Cash open. US equity futures briefly hit the 5% limit down but clambered off lows, whilst major European bourses experience broad-based losses, with the DAX having briefly lost the 8500 level and the FTSE 100 south of 5000. Sectors again reside deep in negative territory, although Telecom names fare somewhat better given the increasing broadband demand as large parts of the world are forced to work from home. Travel & Leisure names meanwhile see more pronounced downside on continued decaying demand. In terms of individual movers, CAC-giant Airbus (-0.4%) fell as much as 10% at the open after withdrawing FY20 guidance, pulling FY19 dividend proposals whilst it also secured a EUR 15bln credit line which will not be covered by the French government’s guarantee scheme. Elsewhere, ITV (-11.0%) sees downside after withdrawing its respective FY20 guidance whilst also announcing cost-cutting measures. Finally, Swedbank (-3.8%) sees losses relatively in-line with the broader market following a report into its money laundering practices which noted that the bank’s Estonian and Latvian arms actively pursued high-risk customers, but the report stopped short of concluding that money laundering practices took place.

Top European News

• Shell Axes Next Tranche of Buyback, Cuts Spending Forecast
• Italy to Start Production Shutdown as Deeper Recession Looms
• ECB’s Villeroy Backs Europe’s Rescue Fund for Virus Crisis
• U.K. Steps in to Save Railways as Johnson Warns of Lockdown

In FX, the Greenback has resumed its march higher after a relatively brief bout of consolidation, with the DXY back above 102.50 and aiming for a retest of resistance just below 103.00 where it faded on Friday following the Fed’s enhanced and expanded liquidity lines to other global Central Banks. However, the ensuing recovery in rival currencies has been rather short-lived as the Kiwi retreats towards 0.5600 in wake of the RBNZ rolling out a Nzd30 bn asset purchase program for 12 months, while the Aussie is back below 0.5800 alongside renewed Yuan weakness circa 7.1400 and Loonie looks destined to test 1.4500 again ahead of Canadian wholesale trade and against the backdrop of waning WTI.

• EUR/CHF/GBP – Also unwinding corrective gains vs the US Dollar as the nCoV pandemic prompts the ECB and BoE to pledge more stimulus via additional QE and/or funding, while the latest rise in Swiss sight deposit balances reveal the extent of heightened SNB intervention to curb the Franc’s appreciation. Eur/Usd has subsequently lost grip of the 1.0700 handle, Usd/Chf is approaching 0.9900 and Cable has recoiled through 1.1600 as Eur/Gbp hovers above 0.9200 in the run up to preliminary EU PMIs on Tuesday.
• NOK/JPY – The G10 outperferformers, with the Norwegian Krona deriving a degree of protection from crude price erosion via heftier Norges Bank foreign currency selling, while the Yen has pared declines on renewed safe-haven demand. Eur/Nok has pulled back from 12.7400+ peaks and Usd/Jpy is meandering within a wide 111.24-109.68 band after another record amount of BoJ ETF buying and Japanese Government supplementary budget reports.
• SEK/EM – Risk off sentiment and the Riksbank’s QE activity are keeping Eur/Sek afloat above 10.1500, while EM currencies are broadly weaker with Usd/Mxn, Usd/Rub and Usd/Try circa 24.8660, 80.6000 and 6.6000 after the Banxico’s pre-meeting ease, in advance of Russia’s next meeting with oil companies circa 14.00GMT and as the coronavirus toll jumps in Turkey.
• FIXED
• Bunds, Gilts and US Treasuries are all retaining the bulk of their latest recovery gains having topped out at 171.39, 134.56 and 138-02 respectively, but the big moves in debt markets of late have been at the Eurozone margins where Spanish bonds have erased all and a bit more of their hefty declines to trade at 154.00 vs 152.71 at one stage, while Italian BTPs have popped just over 140.00 from 138.74. Nothing to substantiate the notion, but it could be that ESCB management and intervention could have kept yields/spreads from spiking/diverging further, or simply the ECB steering QE in that direction according to market conditions. Ahead, the next round BoE APF buying and EZ preliminary consumer sentiment.

WTI and Brent front-month futures have been unable to escape the broader market selloff in the aftermath of a roadblock in the US Senate amid a failure among lawmakers to agree on a COVID financial aid package. WTI May contract briefly slipped below the USD 21/bbl mark to levels last seen in Q1 2002, whilst similarly, its Brent counterpart dipped below USD 25/bbl to hit Q1 2003 levels. Prices continue to feel underlying pressure from parts of the global economy coming to a halt amid coronavirus lockdowns, whilst OPEC+ indecision/uncertainty only adds further pain for the complex. On that front, Russian Energy Minister Novak will be convening with Russian oil producers (1400GMT/1700 local time) to discuss the current environment and low energy prices. This meeting is key to determine Moscow’s stance in OPEC+ and will give an insight as to how much longer Russia can tolerate the continuing slide in crude prices – with the Kremlin noting at the back-end of last week that low prices are unpleasurable but not a catastrophe. Meanwhile, Energyintel’s Bakr has played down the prospect of consensus being reached on an output cut ahead of the meeting. One thing to keep an eye on will be any reaction aimed at Saudi after the Kingdom’s output hike and OSP cuts. As a reminder, Russia’s government spokesperson Peskov on Friday said Moscow sees Saudi oil plan to ramp production as blackmail and will not back down but stated that the country remains ready for contact on prices. Elsewhere, spot gold continues to suffer from position liquidations as investors convert to cash/fund margins – with the yellow metal hovering below the USD 1500/oz mark ahead of last week’s USD 1451/oz low. Copper meanwhile, resumes its slide as COVID’s impact on fundamentals, supply chain and sentiment continues to pressure the red metal which hovered just above the USD 2/lb mark, having dipped below the figure last week.

US Event Calendar

This morning in the PDF (click “view report”) we have again published a sector and individual best and worst review of the last 4 weeks of this crisis and added the numbers from last week. This we’ve done for sectors and individual companies in the S&P 500 and Stoxx 600 and also for individual CDS names in the US and EU IG and HY CDS indices. In the text below at the end we do our usual weekly review of broad global asset performance from last week.

Also in what is a packed PDF we’ve shown the latest new cases update in graph and table form, and we have added mortality rates to account for a world where countries have different policies towards testing affecting confirmed case numbers. This provides added information on how far each country is along in the epidemic and possibly hints at stresses in their healthcare systems.

For now we are seeing a steady slowdown in new case growth across parts of Europe. In Italy for example the daily case growth has dropped to just over 10% from the 13-15% range of the last 5 days. The percentage increase in mortality is also starting to slow. New case numbers are exploding in the US as they start to test more widely, especially in NY State where 15K of the overall cases are. At this rate of growth, over the next few days the US will have the most number of cases worldwide, which given its population size shouldn’t be a huge surprise however the rate of change would be alarming if it continues as testing catches up. There is also some concern that HK and Singapore case numbers are rising again after being fairly flat for a while. It seems imported cases are the problem here. See the PDF for the exhibits.

In terms of how markets are kicking off the week this morning, we’ve seen the all-too familiar sight of US equity futures hitting limit. S&P 500 futures are currently -4.72% as we go to print while in Asia the Hang Seng (-4.17%), Shanghai Comp (-2.05%) and Kospi (-4.75%) are all down. Indian equities have also tumbled -10% and reached their limit down and the rupee slumped to the lowest level on record as the country moves towards to a nationwide lockdown amidst rising cases. The Nikkei (+2.55%) is the exception this morning having reopened following a public holiday on Friday. Meanwhile, the US dollar index is trading down -0.66% this morning and yields on 10y USTs are down -5.1bps to 0.794%. In commodities Brent crude oil is down -3.67% while most base metals are trading lower with Iron ore down -3.89%.

Not helping sentiment overnight was the news that Senate Democrats had blocked the $2tn stimulus bill. Just 47 votes were in favor with 60 needed for it to pass. Another vote has been scheduled for 9.45EST today. Senate Democratic leader Chuck Schumer argued that the “legislation had many, many problems” and that “At the top of the list, it included a large corporate bailout provision, with no protections for workers and virtually no oversight. It also significantly cut back on the money our hospitals, our cities, our states, our medical workers and so many others needed during this crisis”.

House Speaker Pelosi has said that she is planning on releasing her own bill to counter the Senate’s, which could be released as early as Monday. Regardless, any delays to getting stimulus into the economy can risk allowing the downturn to deepen and require even further policy intervention. The plan currently includes $350 billion for small businesses, $250 billion for unemployment insurance, and currently undisclosed billions in relief to distressed industries like airlines, as well as funding for hospitals to address the influx of patients. As discussed there was also talk of empowering the Fed with additional powers in times of market stress. There will be plenty of evidence early this week, when bills and motion come to the floor, to ascertain whether both sides drag this out or if they can quickly come together over an initial package to support the economy.

The Fed’s Bullard also hasn’t helped the mood overnight after suggesting numbers for Q2 US GDP that would make even the most bearish current forecasters’ eyes water. He suggested unemployment could reach -30% and GDP could fall -50%. Bullard also added that “everything is on the table” as far as additional lending programs go which is a view also shared by Kashkari who said overnight that “we’re far from out of ammunition”. He also added that “some people have suggested that we should be providing more support directly to the corporate bonds market, and I’m sympathetic with those views”.

In other news, the Reserve Bank of New Zealand announced a QE program overnight to support the economy of NZD 30bn ($17bn). The program will last over the next 12 months and central bank would buy NZD 750mn of government bonds a week across a range of maturities under the program. Elsewhere, Japanese Prime Minister Shinzo Abe said that a postponement of the Olympics may be inevitable.

In terms of scheduled events this week it’s all eyes on the PMIs tomorrow with the flash numbers for March coming out. It will likely be a bit too early to capture the full impact of all the lockdowns, but I’d imagine some of the numbers coming out tomorrow or in the final numbers a week later will be quite staggering. April’s numbers may still be a better guide to the problems ahead though. We’re going to publish a piece later that uses our PMI vs YoY equity change charts to give a rough approximation of what’s priced in and what the relationship would imply for equities under various PMI figures. Not really much point in saying much about the rest of the scheduled events this week as the unscheduled events will be far more important. Maybe Thursday’s US claims number is another good real time indicator after what was a big jump last week. See the day by day list at the end if you want to see what’s planned.

Also this week we should know a lot more about a stimulus package in Germany. The weekend press discussed how Germany was ready to this week pass through Parliament a €350bn (nearly 10% of GDP) package involving €150 borrowing and potential for another €200bn to buy stakes in companies or back loans.

Looking back at last week now, the S&P 500 saw its worst week since the Financial Crisis, falling -14.98% (-4.34% Friday), with every major sector of the index down over -11%. European equity markets performed remarkably better than their US counterparts, especially with the US selling off 3 out of 5 days in their afternoon session when Europe was closed. The STOXX 600 was down -2.05% on the week (+1.82% Friday, paring gains though after a +4.9% climb at the open). European stocks clearly saw a decent initial reaction to the large stimulus coming in the form of the ECB’s EU750bn bond buying program and the fiscal packages being deployed across the continent. In particular the Travel & Leisure sector saw a +9.8% rally on Friday, which is the sector’s best day since the daily data started in 1991, though the sector still remains -50.0% off its highs. The DAX fell -3.28% (+3.70% Friday), the IBEX slid -2.81% (+0.74% Friday) and Italy saw the FTSE MIB drop -1.39% over the 5 days (+1.71% Friday). Equities in Asia continued to sell off with the Nikkei declining -5.04% (closed Friday), while the CSI 300 dropped -6.21% on the week (+1.79% Friday). Lastly on equities, the VIX jumped on Monday and closed at a new all-time high before declining slightly through the week to finish at 66.0, but this was still up +8.2pts from the Friday prior. Brent and WTI crude oil fell -20.30% (-5.23% Friday) and -29.31% (-11.06% Friday) over the week as the price war between Russia and Saudi Arabia and the growing concern over a prolonged global recession weighed on the commodity from both the supply and demand side.

Even with risk selling off, sovereign bond performance was mixed over the week as correlations to equities have fluctuated and the dramatic fiscal/monetary policy implications of this crisis get digested. The 10yr U.S. Treasury yield ended the week at 0.845% (-29.5bps Friday, -11.5bps last week). 10yr Bund yields gained +22.3 bps on the week even while they fell -12.8bps on Friday to finish at -0.32%. After the miscommunication from the ECB about not being in the business of closing spreads was cleared up, concluding with the new ECB PEPP, markets saw French, Italian, and Spanish 10yr bonds all tighten to 10yr Bunds by -13bps, -38bps, and -11bps over the week respectively. This was a great turnaround for Italy as midweek we saw the BTP-Bund spread stretch to its widest since June 2019, before the policy action on Thursday saw one the biggest drops in spreads since December 2011. Credit spreads had a very bad week in the US. US HY was +278bps wider on the week (+27bps Friday), while IG was +158bps wider on the week (+36bps Friday). In Europe, HY was +203bps wider on the week (-2bps tighter Friday), while IG was +58bps wider on the week (+4bps Friday).

Just as we expected – given the political cover they have been provided – The Fed has this morning unveiled more programs, this time enabling The Fed to buy corporates bonds (primary and secondary).

Additionally, in addition to Treasuries, The Fed will buy Commercial MBS and Agency MBS and all in unlimited size.

The market – for now – is loving the news

Full details below…

Federal Reserve announces extensive new measures to support the economy

The Federal Reserve is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time. The coronavirus pandemic is causing tremendous hardship across the United States and around the world. Our nation’s first priority is to care for those afflicted and to limit the further spread of the virus. While great uncertainty remains, it has become clear that our economy will face severe disruptions. Aggressive efforts must be taken across the public and private sectors to limit the losses to jobs and incomes and to promote a swift recovery once the disruptions abate.

The Federal Reserve’s role is guided by its mandate from Congress to promote maximum employment and stable prices, along with its responsibilities to promote the stability of the financial system. In support of these goals, the Federal Reserve is using its full range of authorities to provide powerful support for the flow of credit to American families and businesses. These actions include:

• Support for critical market functioning. The Federal Open Market Committee (FOMC) will purchase Treasury securities and agency mortgage-backed securities in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy. The FOMC had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. In addition, the FOMC will include purchases of agency commercial mortgage-backed securities in its agency mortgage-backed security purchases.
• Supporting the flow of credit to employers, consumers, and businesses by establishing new programs that, taken together, will provide up to $300 billion in new financing. The Department of the Treasury, using the Exchange Stabilization Fund (ESF), will provide $30 billion in equity to these facilities.
• Establishment of two facilities to support credit to large employers – the Primary Market Corporate Credit Facility (PMCCF) for new bond and loan issuance and the Secondary Market Corporate Credit Facility (SMCCF) to provide liquidity for outstanding corporate bonds.
• Establishment of a third facility, the Term Asset-Backed Securities Loan Facility (TALF), to support the flow of credit to consumers and businesses. The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.
• Facilitating the flow of credit to municipalities by expanding the Money Market Mutual Fund Liquidity Facility (MMLF) to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.
• Facilitating the flow of credit to municipalities by expanding the Commercial Paper Funding Facility (CPFF) to include high-quality, tax-exempt commercial paper as eligible securities. In addition, the pricing of the facility has been reduced.

In addition to the steps above, the Federal Reserve expects to announce soon the establishment of a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses, complementing efforts by the SBA.

The PMCCF will allow companies access to credit so that they are better able to maintain business operations and capacity during the period of dislocations related to the pandemic. This facility is open to investment grade companies and will provide bridge financing of four years. Borrowers may elect to defer interest and principal payments during the first six months of the loan, extendable at the Federal Reserve’s discretion, in order to have additional cash on hand that can be used to pay employees and suppliers. The Federal Reserve will finance a special purpose vehicle (SPV) to make loans from the PMCCF to companies. The Treasury, using the ESF, will make an equity investment in the SPV.

The SMCCF will purchase in the secondary market corporate bonds issued by investment grade U.S. companies and U.S.-listed exchange-traded funds whose investment objective is to provide broad exposure to the market for U.S. investment grade corporate bonds. Treasury, using the ESF, will make an equity investment in the SPV established by the Federal Reserve for this facility.

Under the TALF, the Federal Reserve will lend on a non-recourse basis to holders of certain AAA-rated ABS backed by newly and recently originated consumer and small business loans. The Federal Reserve will lend an amount equal to the market value of the ABS less a haircut and will be secured at all times by the ABS. Treasury, using the ESF, will also make an equity investment in the SPV established by the Federal Reserve for this facility. The TALF, PMCCF and SMCCF are established by the Federal Reserve under the authority of Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.

These actions augment the measures taken by the Federal Reserve over the past week to support the flow of credit to households and businesses. These include:

• The establishment of the CPFF, the MMLF, and the Primary Dealer Credit Facility;
• The expansion of central bank liquidity swap lines;
• Steps to enhance the availability and ease terms for borrowing at the discount window;
• The elimination of reserve requirements;
• Guidance encouraging banks to be flexible with customers experiencing financial challenges related to the coronavirus and to utilize their liquidity and capital buffers in doing so;
• Statements encouraging the use of daylight credit at the Federal Reserve.

Taken together, these actions will provide support to a wide range of markets and institutions, thereby supporting the flow of credit in the economy.

The Federal Reserve will continue to use it full range of tools to support the flow of credit to households and businesses and thereby promote its maximum employment and price stability goals.

Via AlmasdarNews.com

In an article released on Saturday, the New York Times reported that the Trump administration is experiencing a rift regarding their actions against Iran on January 3rd.

“President Trump was getting ready to declare the coronavirus a ‘national emergency’, but inside the White House last Thursday, a tense debate erupted among the president and his top advisers on a far different subject: whether the United States should escalate military action against Iran, a longtime American rival that has been devastated by the epidemic,” the NYT reported.

According to the NYT report, the U.S. Defense Secretary Mark T. Esper and General Mark A. Milley, the chairman of the Joint Chiefs of Staff, pushed back against U.S. Secretary of State Mike Pompeo and National Security Adviser Robert C. O’Brien over the latter’s attempts to increase their aggressiveness towards Iran.

Esper and Milley reportedly warned that a large-scale response could draw the United States into a wider war with Iran and further strain the complicated relationship between the two nations.

Despite the aggressiveness of the U.S. administration towards Iran, it appears that not all American officials are on board for these confrontations.

Citing U.S. officials, the NYT said:

“Some American officials now admit that the killing of General Suleimani has not – as some had hoped – led Iran and its proxies to think twice about fomenting violence inside Iraq and elsewhere.”

In fact, the United States’ assassination of the Quds Force commander Major-General Qassem Soleimani has further driven Iran from the negotiating table, as they have increased their hostility towards Washington.

The U.S. military, which was previously deployed across Iraq, has since withdrawn from several installations across the country and moved to three main bases.

Furthermore, the Iranian-backed groups have increased their attacks in Iraq, prompting the U.S. to increase their own security measures to protect their troops.

Coupled with the crippling sanctions imposed by the White House, it seems highly unlikely that Tehran will give Washington what they want, as Iran has proven that they will not be bullied into any agreement.

Either Neel Kashkari is long physical gold, or central bankers – those “magic people” in the words of Vitas Vasiliauskas – are intent on taking the world down with them instead of admitting they have inflated the biggest bubble ever and that the next inevitable step is fiat currency collapse.

Kashkari, who is part of a growing group of Monday morning quarterbacks who didn’t predict the financial impact of coronavirus until about 10 minutes ago, and who is best known for coming up with the TARP bailout amount during the first bailout yet has somehow managed to fail up all the way to being mentioned as Powell’s imminent replacement, added the certainty that only a Fed governor could add to the situation on 60 Minutes Sunday night.

“Are we in a recession?” he’s asked to start the interview. “If we’re not right now, we will be soon. My base case scenario is we’ll at least have a mild recession like after 9/11. The worst case would be we’d have a deep recession like the 2008 financial crisis, we just don’t know right now.” Kashkari says. “Nobody knows how the virus is going to progress,” he continued, scapegoating the medical community and laying the blame on the bursting of the biggest asset bubble on a virus.

Then, the peculiar topic of cash came up, at which point Kashkari shared an interesting anecdote. 

“I heard from a bank in our region, a well-to-do customer came in and said ‘I want to withdraw $600,000 in cash.’ Now, we can supply all the cash that the banks need to meet their customer’s concerns. But it just speaks to the fear and the uncertainty that’s rippling through the economy,” he says.

When asked further about whether or not banks will have cash, he responded: “This is literally why Central Banks exist. We’re the lender of last resort. This is literally why Central Banks exist. If everybody gets scared at the same time and they demand their money back, that’s why the Federal Reserve is here. We will absolutely meet those demands.”

When asked if the Fed will just “literally print money,” Kashkari admits: “That’s literally what congress has told us to do. That’s the authority they have given us, to print money and provide liquidity into the financial system. We create it electronically and we can also print it, with the Treasury Department, so you can get money out of your ATMs.”

He was then asked about the bond market stress. “People are shunning US Treasury Bonds, which are always thought to be the safest possible investment,” the host says, very matter-of-factly.

Kashkari responds: “Keep in mind, treasury bond prices are still very high relative to history. They’re just not quite as high as they were a couple weeks ago. So they’re still viewed as a very safe investment. But this fear of where the virus is going to go is leading people to say ‘I just want cash’.”

Or, to loosely paraphrase Ray Dalio, in times of stress Treasuries are trash?

Again, matter-of-factly, the host asks: “Can you characterize everything the Fed has done this past week as essentially flooding the system with money?” To which Kashkari responds simply: “Yes.”

The host says “And there’s no end to your ability to do that?”

“There’s no end to our ability to do that.” He later added: “We’re far from out of ammunition…your ATM is safe, your banks are safe. There’s an infinite amount of cash at the Federal Reserve.” 

Kashkari was greeted with a warm response on social media:

Yeah, and they burned infinite cash in fireplaces during the Weimar Republic because they made wood into sawdust to make bread. Neel sounds like an out of touch bubblehead.

— Creemer (@Creemer14) March 23, 2020

Nightmare of epic proportions.

— Gary Kaltbaum (@GaryKaltbaum) March 23, 2020

Fed’s Kashkari tells @60Minutes that the Federal Reserve can print ‘infinite’ amounts of money to stem covid19 crisis.

Soon, how many wheelbarrows of cash will it take to buy a roll of toilet paper? #Hyperinflation

— jason lorenz (@jasonlorenz14) March 22, 2020

People laugh & ridicule me when I explain why I own gold. Meanwhile this guy gets center stage, prime time, CBS Sunday night: https://t.co/blm0rgYG1Z

— Quoth the Raven (@QTRResearch) March 23, 2020

You can watch Kashkari’s full interview here. Although we’re not sure why you would:

This article was written by Brandon Smith and originally published at Birch Gold Group

Last November, in an article titled ‘The Economic Crash So Far: A Look At The Real Numbers’, I outlined the reality of statistical fraud by governments and central banks to hide the ongoing economic downturn. The Everything Bubble, perhaps the biggest debt fueled bubble in history, has been propping up the global economy for several years, but began to waver dramatically at the end of 2018, as the Federal Reserve tightened liquidity conditions into economic weakness (just as they did in 1929 and in the early 1930’s as the Great Depression took hold).

In that article, I warned:

“If the global economy is not on the verge of collapse, then why did central banks keep propping it up for the past ten years? And if central banks have been propping up the system, how much longer do you think they can do this? How much longer do you think they want to do it? What if one day they decide to let the entire house of cards tumble? What if such an event actually benefits them?”

An important factor to this discussion is the idea that the central banks are “ignorant” to the damage they do. This claim is everywhere in the alternative media these days, and it is simply wrong. The banking elites are well aware of the damage they do, and often it benefits their bigger agenda of one world centralization. In fact, Jerome Powell openly admitted in the minutes of the October 2012 Fed meeting exactly what would happen if the Fed took actions to tighten cash flows while markets were addicted to stimulus. Then, as soon as he became the head of the central bank, he implemented that exact policy.

Almost nothing in finance and economics happens without being “managed”, or at least deliberately triggered by central banks. Economic crisis events are a form of massive leverage against the public. They are designed to siphon tangible wealth for pennies on the dollar from the middle class while also setting up social crisis conditions which allow the elites to manipulate the population into accepting less freedom and more globalism.

In the past, I have noted that the central banks have clearly been waiting for something or stalling the crash in preparation for a specific window of time. They needed an event that could be used as cover for the crash that they had been engineering. This event could come in many forms: The trade war was a perfect start, along with war tensions with Iran, but there was really no way of telling what the trigger would be.

Well, now we know.

The COVID-19 pandemic is a perfect cover event. It is a virus with a strangely long incubation period coupled with being highly transmissible and just deadly enough (3% to 5% death rate) to cause fear within the population. This novel virus is not going to go away for a while; it will most likely stick to the global populace like glue for the rest of the year, and like the Spanish Flu which was active for around two years, the longer it circulates the more deaths accumulate.

But the virus is not the cause of the economic collapse; it is only a prime scapegoat, along with the very slow response times of many governments and the World Health Organization to encourage a shutdown in international travel from hot zones, which allowed the virus to spread unhindered. The collapse was taking place before the pandemic ever became a factor.

We are seeing this clearly now in the Fed repo market situation, which has continued to escalate as corporate beggars demand more and more liquidity that the Fed is either not able or not willing to supply. And by liquidity, I’m talking about tens-of-trillions; I’m talking about TARP level or greater fiat injections. I’m talking about direct purchases of stocks and other assets beyond bonds. The investment world wants the Fed to make it rain cash, and while it seems like that is what the Fed is doing…they are not even close yet.

Of course, the next question is, Will it even matter if the Fed initiated full blown helicopter Weimar-style inflation? The answer is no. If the Fed wanted to stall the crash, they would have introduced such measures over the course of the last year. Instead, they did the bare minimum to make it look like they cared about saving markets, which they do not.

The Weimar model, which some financial analysts out there foolishly used as a reason for predicting an endless stock market rally to Dow 40,000 and beyond, does not work because it never worked for Weimar. German stocks still collapsed in 1924, and then again after 1927; there is no precedent in which hyperinflation ensured increased stock profits or higher prices for very long, so don’t expect helicopter money from the Federal Reserve to help either.

Anyone with any sense can see that the prevailing factor of stock market performance has long been corporate stock buybacks, which have now conveniently dropped off the face of the Earth as the COVID-19 pandemic spreads. If you want to know why Fed intervention is doing nothing to reverse the damages in equities, the end of stock buybacks are a good starting point, along with the vast debts among corporations and consumers.

The black hole of debt that has been looming over the global economy has been set in motion, creating a negative feedback loop that makes any intervention useless, beyond a complete “economic reset”, which is exactly what globalists have been wanting and planning for years.

In the meantime, there has been a flight to safety – but what assets are safe? On the surface it looks like almost everything except the U.S. dollar is plunging in value – but looks can be deceiving. As I noted earlier this month in ‘Physical Gold Will Soon Break Free From The Paper Market In Spectacular Fashion’, reports are coming in that purchases of precious metals have skyrocketed, and currently silver rounds are selling for as much as $6 to $10 over the spot price, while gold rounds are selling for at least $50 over spot. The physical market is officially decoupling from the paper market.

At this point, we are seeing unprecedented events beyond even the 2008 credit crash. We must ask, What is our timeline? Looking at China, the first nation to be hit by the pandemic, their economy is still essentially shut down. Initial estimates were that Chinese manufacturing was going to restart on March 20, but reports from China and the Wall Street Journal indicate that this is not going to happen. Every sector of China’s economy has plunged, and it does not look like the supply chain on their side will be restarted in the near term.

This makes sense when you consider the possibility that China has been lying the whole time about the extent of the damage done by the virus. Italy, with a far lower population, has already surpassed China’s death count with half as many confirmed infections. How does a country with a billion people (many of them older), packed together in cities like sardines, maintain a death rate of only 2%, while Italy, a country with only 60 million people, has a death rate of around 6%? China has much to answer for, but I don’t think we’ll ever get the whole story.

COVID-19 is not likely to burn out in the spring as many are hoping, and going by China’s manufacturing shutdown, we have at least three solid months of crisis in the U.S. and Europe before there is a chance of remission.  But even if the virus does hit a wall, the economy will already be sunk beyond repair. This is the kind of collapse that takes years to recover from, and the global elites want to be the people that take charge of the recovery.

My biggest concern right now besides the supply chain issue is the potential for a liquidity crisis and credit crisis leading to a “bank holiday” – a widespread banking shutdown. I believe this will happen, and probably sooner than we might expect. Already the mainstream media is telling people NOT to remove any cash from their bank accounts, which is a bad sign. Usually when the MSM is telling you not to do something, it is time to do the opposite.

I am not necessarily encouraging people to make a run on the banks, but I will say that you better have some cash on hand through this crisis, because chances are good that you will wake up one morning and discover the banks locked and the ATMs unplugged.

Understand that this is not a short-term crisis that will correct itself. This is a long-term disaster. If you are not prepared accordingly, you must do so NOW. Time has almost run out.

*  *  *

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COVID-19 has infected 328,275 people across the world and caused 14,366 deaths, according to the latest figures from Johns Hopkins. Europe has turned into the next China, with cases and deaths on an exponential curve in Italy, Spain, Germany, France, Switzerland, and the UK. 

In France, the fast-spreading virus has killed 562 and led to more than 14,400 confirmed cases on Sunday. The French hospital system is on the brink of being overwhelmed by virus patients, with hospital beds and ICU-treatment capacity is quickly running out. 

French hospitals are running out of protective gear, leaving medical staff susceptible to contracting the virus. 

It has become entirely evident that the European country was not prepared to fight a pandemic. This is the claim that is being made by three French medics in a new lawsuit against Minister Edouard Philippe and former minister of solidarity and health, Agnes Buzyn. 

Lawyers for the medics told RT News that the complaint alleges the two senior officials failed to prepare the country for a health crisis that has paralyzed it.

The complaint said both officials were completely aware of the virus in January but “chose not to act.” 

“At some point, the truth needs to be told, which is that these people have been lying to us from the start,” Fabrice di Vizio, the lawyer representing the three plaintiffs, told RT.

The complaint referenced an interview Buzyn gave the Le Monde newspaper, in which she regrets leaving her government post and running for mayor of Paris as the virus crisis was developing earlier this year:

“I knew that the tsunami wave was before us. “On January 30, I warned [Prime Minister] Edouard Philippe that the elections could probably not be held. “We should have stopped everything, it was a masquerade.”

The French government has rejected any wrongdoing and has said their response to the virus has been satisfactory. 

Di Vizio told RT that the government is still unprepared and lacks critical protective gear for healthcare workers: 

“Last week the government spoke about the masks. You remember those pompous speeches by the president, who was all commander-in-chief in tone and promised the masks?” he said. “Masks are a primary tool of war since they protect the health workers. Have those masks arrived?”

It would be an absolute disaster if French medics and healthcare workers joined the anti-government “Yellow Vest” protestors out of their disgust for the failure of the government. After all, last month, French firefighters joined the protests. 

Authored by Kit Knightly via Off-Guardian.org,

So this is how Liberty dies… with thunderous applause.

A few days ago James Corbett posted a video titled “Is this THE big event?” the answer to that increasingly looks to be “yes”.

Not the virus itself, you understand, which official statistics still show to be minor compared to annual flu outbreaks. But rather, what it’s being used for. The West’s vestigial democratic forms, and slowly atrophying civil liberties are facing a final assault from draconian authoritarians sensing (or creating) their big moment.

Spain is enjoying “martial law in all but name”, while Italy is likewise bringing in the army.

In France, Macron has “declared war” on the coronavirus, essentially locking the entire country up inside their homes unless they have “a good reason” to leave. A reason which must be submitted in writing to the police.

Public gatherings are of course strictly forbidden. Elections are halted.

No word yet on what the Gilets Jaunes plan to do. There is a march – Act 71 – planned for today. Will it go head? If so, will they be met with more violence? Maybe. Only now instead of being ignored by the media they will be branded “selfish” for putting “members of the public at risk”.

War metaphors are prevalent in the UK too, the “spirit of Blitz” lives on. Apparently. We’re going to start making ventilators like we used to make Spitfires, (presumably we’ll be asked to send in our pots and pans to help in that regard). The Daily Mail actually interviewed the 103 year old Vera Lynn, who thinks we should all “pull together”.

This encouragement of ersatz community spirit is all a prelude to the passing of the Coronavirus Bill, a truly terrifying piece of legislation.

The proposed measures span everything from the predictably totalitarian to the worryingly bizarre.

First, the police can detain a person they suspect of being infectious:

Therefore, the bill will enable the police and immigration officers to detain a person, for a limited period, who is, or may be, infectious and to take them to a suitable place to enable screening and assessment.

But don’t worry, it’s only for a “limited period” (which is legally meaningless. A “limited period” can be defined as any time less than forever.)

They will also remove “restrictions” on vaccination:

removing a current restriction in how Scottish territorial Health Boards can deliver vaccination programmes would mean that, when a vaccine becomes available, it can reach as many people as possible.

…and postpone elections:

postpone the local, mayoral and Police and Crime Commissioner elections that were due to take place in England in May this year until May 2021. Provision will also be made to postpone other electoral events over the course of the year (such as by-elections)

…and grant legal immunity to people involved in treating the disease (of special relevance given the likelihood of untested vaccines be rushed into mass use):

provide indemnity for clinical negligence liabilities arising from NHS activities carried out for the purposes of dealing with, or because of, the coronavirus outbreak,

It’s a grab-bag of vaguely worded powers, wide open to “interpretation”. It is highly dangerous. There’s even hints that London could be put under total lockdown.

Most bizarre are the relaxed legal regulations for registering deaths (which we discuss in more detail here).

All told, it’s a terrifying prospect for the future of the country.

It’s not hard to envision a world where a person can be “detained” on “suspicion of having the virus” when they are perfectly healthy, and their family has all their social media posts about it taken down for spreading “misinformation”.

Hell, the new rules would then make it easier to cover up any deaths in custody by having private funeral directors register deaths that require no secondary confirmation. A claim this person died “whilst being treated for Covid19” would also render all those involved legally immune.

That is an extreme example, but there lies the danger of vaguely worded “powers”. They are wide open to abuse.

Yesterday Britain saw its first arrest under these new rules, a young man (not reported to be sick at all) was arrested on the Isle of Man for refusing to self-isolate. He now faces up to 3 months in prison, or a fine of £10,000.

Also announced yesterday, Boris is shutting all service businesses down. Clubs, bars, cafes, gyms, leisure centres, restaurants, cinemas. All gone. Putting potentially millions of people out of work, but introducing a new benefit (one you have to attend a Job Centre to claim, where it’s well known you can’t catch viruses).

The Danish compulsory vaccine/treatment law is looking comparatively tame at this point.

China is tagging people with electronic bracelets, and scanning crowds with special helmets to monitor anyone with a slight temperature.

Israel, having suspended Netanyahu’s corruption trial, is now busying itself eradicating some civil liberties. Their proposed use of harvested mobile phone data to track and surveil those possibly infected is the most heartwarming use of illegally gathered private information I can recall.

Never to be outdone, the US is putting entire cities and states under total lockdown. Dystopian “shelter in place” orders have been issued for the whole of California. Meetings of more than 10 people are banned, with some regions setting helplines for mean little volunteer Kapos to report any illegal congregations.

“Secret emergency plans” for a military government in the event DC is “devastated” were recently “leaked” to Newsweek. You can feel the General’s eagerness through the prose.

Sean Penn is all for the idea.

The private sector is getting in on the act too, with YouTube announcing their automated system is going to be taking down a lot more videos (they blame working from home, but the idea Google doesn’t already have a facility for working remotely is frankly absurd). The five major Tech Giants released a joint statement on “combatting misinformation” and “boosting authoritative sources”.

Well-known medical expert Bill Gates did an AMA on Reddit (transcribed here), in which he casually drops some chilling ideas into the conversation:

Eventually we will have some digital certificates to show who has recovered or been tested recently or when we have a vaccine who has received it.

All in all, our freedoms are being swamped. Big corporations and states alike are setting boundaries on individual rights on a flimsy pretext.

Is anyone in the media reporting that? Of course not. Instead we’re getting fawning celebrity-based drivel like this in the Independent, trying to convince us “we’re all in this together”, or weasel-worded nonsense like this from Jonathan Freedland in The Guardian where he mourns Johnson’s “libertarian” spirit and reluctance to impose social control. That would be the mass-surveilling, drone executing, war-supporting type of libertarian. A crass and obvious example of narrative management.

Even members of the alt-media are falling for this, with prominent voices hailing the measures as necessary or demanding “further action” (one usually sane analyst is advocating locking all of those “probably infected” inside empty sports stadiums to be “medically monitored”). Somehow former Goldman Sachs banker and Hedge Fund manager Rishi Sunak is being praised as some kind of Nye Bevan figure. It’s almost literally insane.

We’ve gone over the numbers countless times. They don’t add up. The agenda is outstripping the statistics. The coronavirus, in pure numbers terms, is a rounding error on the annual flu season. The Swine Flu “pandemic” of 2009 was 10x more widespread and 100s of times more fatal…did any of this panic porn appear? Did it “change what normal meant”?

No, it was just a new type of flu. It passed, there was media hype, of course, but the world remained the same.

The time for arguing over whether the CFR is 2% or 3% is done, because even if the disease is as bad as they are reporting, none of it can justify the Orwellian nightmare that Britain (and much of the rest of the developed world) is turning into.

People with platforms need to focus on this, without falling for rhetorical traps or emotionally manipulative sob-stories. Human-interest anecdotes are meaningless, and feel good articles about “pulling together” or “not taking any risks” are negative panic at best or enabling emergent fascism at worst.

That would be actual fascism. Not the pretend type that the anti-Trump “resistance” has been rabbiting on about for three years.

Consider that: This is the EXACT SITUATION everybody from the NYT to CNN was hysterically warning Trump would introduce since he was first elected, and where are those people now? Cheering him on. Because of “public health”.

The same people ranting about Boris Johnson being an alt-right neo-Nazi racist and unfit for public office before Christmas, now want to give the man legal authority to arrest anyone with a cough and nail pensioners inside their homes.

“Social distancing” is just another word for mass quarantine, and as Dr Joel Kettner said on the radio last week, there’s no evidence to suggest it actually works to control diseases. Control people though? Well, that it does like a charm.

But maybe I’m over-reacting, right? After all, this is only for a short time. We’ll go back to normal soon enough. Those two years will just fly by.

Perhaps a quick history lesson in “special powers” and “temporary measures”?

Well, let’s look at the Patriot Act – sweeping, authoritarian changes to the US legal system which were enacted after 9/11 on a “temporary” basis and have been extended and expanded by every President since. It is still very much in place today.

Or France’s “state of emergency”, granting “special powers” to the police after 2015 shootings in Paris. Those were extended by Hollande for years, until Macron “ended” the State of Emergency by essentially signing those powers into law permanently. They became the “new normal” too.

Or, the golden oldie, the Reichstag Fire Decree. Passed after the eponymous fire, it “temporarily” suspended German civil liberties in name of rooting out communist insurgents. You probably already know how that turned out.

“Special powers” don’t go away. They are not temporary, they won’t be surrendered. Everything we give the government our permission to do, they will do. For the foreseeable. And you know why?

Because they become the Bear Patrol. The rock that keeps tigers away. Once they are there, and everything calms down, they can be hailed as the reason everything is calm.

In two years, when the bill is set to expire, there will be no more “pandemic”…but the powers will stay. Because they “kept us safe during the pandemic”. Because they cut knife crime, or boosted public health, or they are good for the environment (that will be the big one). There’ll be some scary stories in the media in the last couple of weeks before the expiry date, and the bill will be extended.

Pandemic or no pandemic, you can’t just shut your eyes to the world being re-shaped. That’s what world governments are doing, ALL world governments. We can’t fall back on increasingly obsolete notions of US/UK/EU = “bad” and China/Iran = “good”. Rulers are rulers, they want authority and need power.

And they are re-forging society to a shape that better suits their purposes, attempting to change what people consider “normal”.

How do we know that? Because they are telling us.

The Guardian alone has had three opinion pieces discussing the “new normal” in less than a week, two of them on the same day. The technocrats and eugenicists are all over it too, barely containing their glee that the “world will never be the same”.

Perhaps the only good news is, en masse, the public don’t seem to be totally convinced. In fact, oddly enough, the alternate media crowd seem a lot more caught up in the hysteria than those who only vaguely follow the news. An NPR poll showed that 56% of Americans think the virus is being overblown. Hence everyone from Taylor Swift to Kylie Jenner insisting it “is a real thing”.

In one key area, the Coronavirus Bill tells the absolute truth: “Public support and compliance is crucial”. They need our permission to do this. Do we really want to grant it?

It’s really important that we all wake up to what is happening here. Because the police state they want to birth is a disease with a much higher death-rate than 2%, and it won’t be cured with two-weeks bed-rest.

Over the years, we’ve had a lot of coverage on hypersonic developments in Russia and China, mostly because their hypersonic programs are more advanced than the US. Now it appears the US could be catching up, as a new video via the US military shows a recent test of a hypersonic weapon.

The US Department of Defense (DoD) reported that it successfully launched a common hypersonic glide body (C-HGB) missile from the Pacific Missile Range Facility, Kauai, Hawaii, on March 19. 

U.S. Navy and U.S. Army jointly tests hypersonic glide body pic.twitter.com/9Fr8YvlBUS

— Dylan Malyasov (@DylanMalyasov) March 21, 2020

The Missile Defense Agency (MDA) monitored the launch of the hypersonic missile as it hit speeds above Mach 5. Information gathered in this launch will further the DOD’s hypersonic program, reported Defense Blog. 

“This test builds on the success we had with Flight Experiment 1 in October 2017, in which our C-HGB achieved sustained hypersonic glide at our target distances,” said Vice Adm. Johnny R. Wolfe, Director, Navy’s Strategic Systems Programs, which is the lead designer for the C-HGB.

“In this test we put additional stresses on the system and it was able to handle them all, due to the phenomenal expertise of our top notch team of individuals from across government, industry and academia. Today we validated our design and are now ready to move to the next phase towards fielding a hypersonic strike capability.”

“This test was a critical step in rapidly delivering operational hypersonic capabilities to our warfighters in support of the National Defense Strategy,” said US Army LTG L. Neil Thurgood, Director of Hypersonics, Directed Energy, Space and Rapid Acquisition, whose office is leading the Army’s Long Range Hypersonic Weapon program and joint C-HGB production.

“We successfully executed a mission consistent with how we can apply this capability in the future. The joint team did a tremendous job in executing this test, and we will continue to move aggressively to get prototypes to the field.”

We noted back in October that the DoD will field C-HGBs sometime in 2023. 

Each missile is capable of achieving Mach 5 or higher, which is about 3,800 mph. 

Hypersonic missiles are the DoD’s top modernization effort at the moment because it is behind the hypersonic curve.

Shown below, C-HGBs can outmaneuver the world’s most advanced missile defense shields. 

As a pandemic consumes the world, the global economy crashed, and President Trump already plowed $2 trillion into military modernization efforts — WWIII with Russia and or China could be much closer than anyone thinks. 

Authored by Judith Bergman via The Gatestone Institute,

Since the outbreak of coronavirus in Italy, Italians have learned that other European Union member states do not always practice the beautiful words that they like to preach — especially solidarity.

Solidarity is supposedly a fundamental principle of the European Union. It is enshrined in the EU treaties and the EU refers to it as one of its goals. According to article 222 of the Treaty on the Functioning of the European Union, one of the two principal treaties of the European Union:

“The Union and its Member States shall act jointly in a spirit of solidarity if a Member State is… the victim of a natural or man-made disaster. The Union shall mobilise all the instruments at its disposal… to assist a Member State in its territory, at the request of its political authorities, in the event of a natural or man-made disaster”.

The EU has invoked the solidarity principle when it comes to receiving migrants: During the 2015 migrant crisis, the EU assigned each EU country a fixed quota of migrants and refugees to accept. In 2017, the EU took Hungary, Poland and the Czech Republic to the Court of Justice of the European Union (CJEU) over their refusal to take migrants. In late October 2019, the Advocate General, legal advisor to the Court, said that EU law must be followed and that the EU’s principle of solidarity “necessarily sometimes implies accepting burden-sharing”. The Court has yet to issue a ruling on the issue, but it usually follows the advice of the Advocate General.

The EU even has a specific unit, the Emergency Response Coordination Centre (ERCC), which operates under the EU’s Civil Protection Mechanism, which helps both EU and certain non-EU states with crisis management, in accordance with the solidarity principle. This is where Italy appealed for help at the beginning of its coronavirus crisis — and received in return exactly nothing.

“We asked for supplies of medical equipment, and the European Commission forwarded the appeal to the member states,” Italy’s permanent representative to the EU, Maurizio Massari, told Foreign Policy. “But it didn’t work.”

In addition, Germany and France, leading EU member states, even imposed bans or limitations on the export of facemasks and protective equipment. This drew mild criticism from European Union officials, such as Stella Kyriakides, the EU’s Commissioner for Health and Food Safety, who had to remind member states, fruitlessly, that, “Solidarity is key.”

In the past, EU member states have shown solidarity. According to its website, since its inception in 2001, the EU Civil Protection Mechanism has responded to more than 330 requests for assistance inside and outside the EU. In July 2018, for instance, when Sweden was facing widespread wildfires, primarily forest fires, EU member states sent firefighting assistance.

The coronavirus outbreak, however, is different from geographically isolated crises, such as forest fires in a member state that can be managed by pooling firefighting or other resources. When an entire continent is in the midst of a highly contagious virus epidemic, solidarity becomes a more complex issue. Every state inevitably considers whether it can afford to send facemasks and protective equipment that might be needed for its own citizens. In other words, every state considers its own national interest first. In the case of Italy’s appeal for help, EU member states made their own interests their highest priority. This is classic state behavior and would not have caused any outrage prior to the establishment of the European Union.

What the coronavirus crisis reveals is that the member states of the European Union will revert to national interests when extreme circumstances call for it. While such revelations may not spell the immediate end of the European Union, they certainly raise questions about the point of an organization that pledges solidarity as a founding principle, but abandons that principle the moment it is most called for.

Coronavirus, however, is not the only recent issue to put into question the viability of the European Union.

The current crisis on the Greek-Turkish border has shown the EU not only as unhelpful, but an actual liability: The EU left an already overwhelmed Greece to deal with the migrant crisis — manufactured by Turkish President Recep Tayyip Erdogan for political gain — on its own, despite the apparent rhetorical support by European Commission President Ursula von der Leyen, who called Greece Europe’s “shield”.

On top of Europe’s attempts to deal with the coronavirus outbreak, the EU Commissioner for Home Affairs, Ylva Johansson, ordered that Greece must allow the migrants that Erdogan transported to the border to apply for asylum. Greek Prime Minister Kyriakos Mitsotakis had announced earlier that Greece was suspending all asylum applications based on article 78 (3) of the Treaty on the Functioning of the European Union, which states:

“In the event of one or more Member States being confronted by an emergency situation characterised by a sudden inflow of nationals of third countries, the Council, on a proposal from the Commission, may adopt provisional measures for the benefit of the Member State(s) concerned”.

Ylva Johansson, however, said that the commission would not propose suspending the right to asylum:

“Individuals in the European Union have the right to apply for asylum. This is in the treaty, this is in international law. This we can’t suspend.”

Suspending all common sense, however, is apparently something of which the EU is fully capable. As Johansson was making her irrational demands to Greece at a time when Europe was at a breaking point grappling with the coronavirus outbreak, German Chancellor Angela Merkel appeared to show signs that she might submit to Erdogan’s migrant blackmail. Less than two weeks after Erdogan had thousands of migrants transported to the border with Greece, Merkel said, according to a report by Die Welt, that she would work “with all her strength” to “take the EU-Turkey agreement to a new level”.

The agreement to which Merkel was referring is the 2016 deal between the EU and Turkey, to hold migrants in Turkey in exchange for six billion euros. Up until now, the EU had focused less on Turkey’s other demands, also written in the 2016 deal, but Merkel’s recent statement brought the issues back into focus: Visa-free travel for Turks in the EU, duty-free movement of Turkish goods within the EU, the setting up of a “safe zone” in northern Syria, and the resumption of regular meetings between Turkey and the EU.

If the EU were to approve visa-free travel for Turks — or whoever has the means to buy a Turkish passport — millions of Turks would be able to enter the EU legally and potentially “disappear” there. Already at breaking point, the EU would arguably become a very different kind of “European” Union with Turkey, a country of 80 million people, literally invited to enter Europe.

Germany also pledged more money for Turkey. According to Deutsche Welle, Merkel told Erdogan that she was willing to increase EU funds for “the care of refugees in Turkey in return for Ankara stopping thousands of refugees attempting to cross the Turkish-Greek border”.

Turkey’s migrant blackmail worked surprisingly well and surprisingly fast. “We must not allow refugees to be turned into pawns for geopolitical interests,” announced German Foreign Minister Heiko Maas at the beginning of the Greek border crisis. “No matter who tries, they must reckon with our resistance.” Germany, and the EU with it, has been exposed as a house of cards. As the house folded, the world was left in little doubt that Erdogan was running the show.

Consequently, on March 18, Erdogan announced that the migrant crisis that he had orchestrated was officially over: Turkey was closing its borders with Greece and Bulgaria, ostensibly due to the coronavirus. The Telegraph cited reports from Turkish news website Medyascope that around 150 buses had been readied to collect migrants from the border and ferry them back to Istanbul and refugee camps. Erdogan got what he wanted.

All Erdogan needs to do now it sit back and wait for the EU, with Merkel at the helm, to meet his demands.