Category: zerohedge

Update (1030ET): A flashing-red headline from BBG just declared that Spain is announcing a national state of emergency over the outbreak, as the number of confirmed cases in Madrid soars amid a rash of deaths.

Socialist Spanish PM Pedro Sanchez said that he isn’t ruling out the possibility that there will be more than “100,000 cases of coronavirus in Spain” as early as next week.

Trudeau plans to address the nation at noon ET, presumably to discuss the situation with him and his wife. In the mean time, the Canadian Parliament has been suspended for the time being.

Brazil’s government denied these rumors last night, but reports have persisted, and now the Guardian is reporting that Brazilian President Jair Bolsonaro has tested positive for Covid-19. His communications secretary tested positive earlier this week, raising questions about whether President Trump and VP Pence were exposed.

Switzerland is reportedly planning to reintroduce “checks” at all borders, after blocking Italians from entering earlier this week, as infections inside the country has started to accelerate.

*  *  *

Update (1022ET): The most prestigious golf tournament in America has just postponed play because of the coronavirus outbreak.

The 2020 Masters Tournament has been postponed due to “ever-increasing risks associated with the widespread coronavirus,” Augusta National Golf Club announced.

“Respecting the health and well-being of everyone associated with these events and the citizens of the Augusta community, the 2020 Masters Tournament, the Augusta National Women’s Amateur and the Drive, Chip and Putt National Finals have been postponed,” Chairman Fred Ridley said in a statement.

Statement from Chairman Ridley:

“Considering the latest information and expert analysis, we have decided at this time to postpone @TheMasters, @anwagolf and @DriveChipPutt National Finals.”

Full details at https://t.co/FX2AN1MLsY pic.twitter.com/Z2DjS5TYdG

— The Masters (@TheMasters) March 13, 2020

The tournament was initially scheduled for April 9-12. It’s not clear when play will begin.

The Boston Marathon has also been postponed until Sept. 14, according to a statement from its organizers.

*  *  *

It’s been another crazy morning around the world as more sports leagues suspended play and governments – most notably Germany  – pledged to whip out their credit cards and spend whatever might be necessary to soften the economic blow, a chorus of reassurance that has helped to drive markets back to limit-up.

Following reports last night that Arsenal’s manager and a Chelsea player had both tested positive for the virus, the Premier League decided during an emergency meeting Friday morning that it would suspend play. Now, the Champions League, Premier League and Europa League have all been suspended because of the virus.

Indian Public health authorities confirmed the first virus-related death in the world’s second-most populous country on Friday. Fewer than 100 cases have been confirmed across the country, and dozens who came into contact with the man have been quarantined. But the government’s inability to safely quarantine and treat the now-deceased patient was hardly encouraging.

After closing its border with Italy, Austria has cancelled international flights to/from Spain, France and Italy and is reportedly weighing a wider border closure. Nearby, the Czech Republic is planning to close its borders, and people won’t be allowed to leave the country. In the Balkans, Slovakia has closed its borders completely.

The FDA has launched a 24/7 hotline for patients worried about their infections status. In Washington, President Trump and VP Mike Pence have both decided not to be tested, in accordance with their physicians’ advice since neither are showing symptoms, despite both having come into contact with the infected or potentially infected.

After we reported yesterday that Trump shook hands and ate dinner with a Brazilian official who turned out to be infected, the Washington Post reports that an Australian government minister who just tested positive for the virus met with Ivanka Trump and AG William Barr, as well as a handful of other Washington officials.

In a statement, Aussie Minister Peter Dutton said that he woke up on Friday morning “with a temperature and sore throat” and was “subsequently tested for COVID-19.” Dutton was advised by Queensland Health that his tests returned positive on Friday afternoon. Dutton had met with Trump, Barr, Counselor to the President Kellyanne Conway and Director of the Domestic Policy Council Joe Grogan in Washington a week ago when Aussie PM Scott Morrison visited the White House for the first time.

As individuals try to gauge their infection risk, scientists have found that the coronavirus can stay infectious for days on some surfaces. Researchers have also now confirmed that the coronavirus can be contagious in the body before symptoms appear.

Across the US, nearly every state has diagnosed at least one case of the virus, while more than 1,600 cases of the virus are being treated across the US, including at least one patient in nearly every state and the District of Columbia. At least 41 deaths have been reported in the country as public life appears to be grinding to a halt.

WaPo

Washington DC has joined Seattle and Houston in closing its schools, while Michigan, Mexico and Oregon followed Maryland and Ohio by shuttering their schools. These closures will take effect Monday, and last until the end of March, or beginning on April.

“We are going to do what we have to do. We are in a crisis,” Ohio Gov. Mike DeWine said. Closures in Ohio will begin at the close of classes Monday and run through at least April 3, DeWine said. “It may be a lot longer.”

“This is a necessary step to protect our kids, our families, and our overall public health,” said Michigan Gov. Gretchen Whitmer in a statement released on Friday.

In New Mexico, Ryan Stewart, the state’s public education secretary, described the closures as a “proactive measure” to limit the potential community spread of the virus.

And while Oregon had worked hard to keep schools open, student absences and issues with staff have made it “impossible to functionally operate schools,” Gov. Kate Brown.

Kentucky stopped short of a mandatory order and “recommended” that schools should be closed. In California, Sacramento and San Francisco have also closed schools.

Meanwhile, back in China, all 42 Apple stores have reopened.

After Trump’s “misstatements” on Wednesday helped trigger one of the worst trading sessions on Wall Street since the crisis, the White House announced a series of steps on Friday aimed at boosting the availability of coronavirus testing, one of the most heavily-criticized aspects of the government’s response.

According to WSJ, a new, high-speed coronavirus test has been granted emergency approval by the FDA in a desperate attempt to expand testing capacity for the pathogen.

To facilitate testing, the FDA has created a 24-hour emergency hotline for laboratories having difficulty getting materials or finding other impediments to running tests, according to announcements early on Friday. The FDA has also authorized more private labs in NY State to conduct the tests, per CNN.

Officials also announced they would be doling out nearly $1.3 million in federal money to two companies trying to develop rapid Covid-19 tests that could have accurate results within an hour.

In Italy – not Iran – the president of the Medical Guild of Varese, Roberto Stella, has died of coronavirus at the age of 67. Stella died on Tuesday in Como, Italy, after being hospitalized following his diagnosis. He’s the first high-level public health official in Italy to succumb to the virus.

In a statement, Italy’s National Federation of Doctors and General Practitioners mourned Stella’s death. They added that they hope the government will take notice of the dangers Italian doctors and nurses are facing.

“He was the example of the capability and hard work of family doctors,” Silvestro Scotti, national secretary of the federation, said about Stella.

Spain has emerged as the strongest contender for 2nd-worst outbreak in Europe in what was until recently a three-way contest with France and Germany. Last week’s International Women’s Day March helped expedite the outbreak, according to city officials in Madrid, who are begging Spain’s federal government for some assistance.

In Boston, the JFK Presidential Library and Museum is closing immediately after two employees attended a conference last week where other attendees had confirmed cases of coronavirus, it said in a statement.

One of the largest livestock exhibitions and rodeos in the world will close early due to novel coronavirus fears, according to Houston city officials, who announced Friday that the city’s major Livestock Show and Rodeo will close earlier. It had been scheduled to run until March 22.

US Treasury yields are plunging after The Fed announced what amounts to ‘Emergency QE’ to buy $33 billion in bonds at maturities up to 30 Years…

10Y yields have plunged 16bps on the headline…

And 30Y yields are now down 3bps on the day, after being up 35bps overnight…

FRBNY Statement Details:

The Desk will conduct purchases in each of five maturity sectors below at the times indicated, subject to reasonable prices. 

• 20 to 30 year sector at 10:30 – 10:45 am and 2:15 to 2:45 pm for around $4 billion each

• 7 to 20 year sector at 11:15 – 11:30 am  for around $5 billion

• 4.5 to 7 year sector at 12:00 – 12:15 pm for around $8 billion

• 2.25 to 4.5 year sector at 12:45 – 1:00 pm for around $8 billion

• 0 to 2.25 year sector at 1:30 – 1:45 pm for around $8 billion

These purchases are intended to address highly unusual disruptions in the market for Treasury securities associated with the coronavirus outbreak.  These purchases are part of the $80 billion of planned monthly purchases, including both $60 billion of reserve management purchases and $20 billion of reinvestments of principal payments received from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities.

The House is expected to vote on an aid package in response to the Wuhan coronavirus outbreak after a deal was struck with congressional Republicans and Treasury Secretary Stephen Mnuchin, according to National Review.

The package will include guaranteed free testing and 14 days of paid sick-leave for patients, along with food assistance and Medicaid programs, unemployment benefits, and tax credits for small and medium-sized businesses affected by COVID-19. That said, “Democrats do not think payroll tax relief is an appropriate response,” according to House Majority Leader Steny Hoyer (D-MD).

Republicans initially were skeptical of the legislation due to provisions they feared would permanently increase paid leave entitlements, while Democrats did not want to include language explicitly prohibiting funding for abortions in the bill.

“We’ve resolved most of our differences, and [for] those we haven’t we’ll continue the conversation, because there will obviously be other bills,” Pelosi told reporters on Thursday. –National Review

“It’s fair to say we’re close to an agreement, subject to the exchange of paper, and hope to have an agreement tomorrow,” said Pelosi, adding in a letter to lawmakers that the bill “will take further effective action that protects the health, economic security and well-being of the American people.”

Pelosi also wrote that this won’t be the last coronavirus aid package – and that Congress would “get to work on a third emergency response package that will take further effective action that protects the health, economic security and well-being of the American people.”

NR also reports that Senate Majority Leader Mitch McConnell (R-KY) on Thursday announced that the Senate would skip recess this coming week in order to tackle coronavirus legislation.

“I am glad talks are ongoing between the Administration and Speaker Pelosi,” McConnell tweeted. “I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong.”

Notwithstanding the scheduled state work period, the Senate will be in session next week. I am glad talks are ongoing between the Administration and Speaker Pelosi. I hope Congress can pass bipartisan legislation to continue combating the coronavirus and keep our economy strong.

— Leader McConnell (@senatemajldr) March 12, 2020

That said, there may be some friction between the Democratic-controlled House’s solution and the GOP-controlled Senate’s.

Fortunately, we do not need to choose between Speaker Pelosi’s first draft and doing nothing. I am glad the Administration is continuing talks. The Senate is ready to consider a bipartisan, bicameral package if House Democrats return to the table & work with the President’s team.

— Leader McConnell (@senatemajldr) March 12, 2020

 

As we have been detailing all week, this has been the worst period for Risk-Parity (or vol-targeting) funds in history, with a massive breakdown in the stock-bond correlation from historical ‘norms’…

Causing Risk Parity funds in particular are to suffer the worst 4 day period on record.

However, as Nomura’s Charlie McElligott believes, vol-targeting funds have essentially nothing left to sell in the Equities-space, “only” -$7.4B sold yday in US Eq, as the aggregate Equities $exposure is currently “0 %ile” since 2000

CTAs are almost entirely -100% Short across the Global Equities futures strip with the exception of Nasdaq (“just” -64% Short), and have added leverage into the move lower in recent days.

However it is actually possible that further extension of today’s violent rally is at risk of triggering “mechanical” covering, with levels to buy “feasibly” within range over coming days, and in light of this “realized vol” environment making such moves possible

• NASDAQ 100, currently -63.6% short, [7215.25 close], more selling under 7223.33 (+0.11%) to get to -82% , max short under 7222.61 (+0.10%), buying over 7771.75 (+7.71%) to get to -25% , more buying over 8275.57 (+14.70%) to get to 56% , flip to long over 7772.48 (+7.72%), max long over 8276.29 (+14.71%)

• HangSeng CH, currently -100.0% short, [9644.0], buying over 10561.43 (+9.51%) to get to -56% , more buying over 10649.88 (+10.43%) to get to 25% , flip to long over 10649.88 (+10.43%), max long over 11103.68 (+15.14%)

• Nikkei 225, currently -100.0% short, [18360.0], buying over 20496.43 (+11.64%) to get to -82% , more buying over 21271.86 (+15.86%) to get to -25% , flip to long over 21273.7 (+15.87%), max long over 22649.68 (+23.36%)

• S&P 500, currently -100.0% short, [2468.9], buying over 2759.71 (+11.78%) to get to -82% , more buying over 2918.04 (+18.19%) to get to -25% , flip to long over 2918.28 (+18.20%), max long over 3048.26 (+23.47%)

• Euro Stoxx 50, currently -100.0% short, [2567.0], buying over 3128.74 (+21.88%) to get to -82% , more buying over 3337.62 (+30.02%) to get to -25% , flip to long over 3337.87 (+30.03%), max long over 3463.44 (+34.92%)

• Russell 2000, currently -100.0% short, [1109.9], buying over 1462.0 (+31.72%) to get to -82% , more buying over 1484.17 (+33.72%) to get to -25% , flip to long over 1484.28 (+33.73%), max long over 1529.24 (+37.78%)

Risk Parity however was the story yesterday however, “by far” the largest culprit in the cross-asset deleveraging purge, with our model estimates showing aggregated gross-exposure slashed from 450% (61st %ile since ’11) down to 305% (2.9%ile) on the session—see below for a scale of the deleveraging on the asset-level:

So, is the worst over? Or is that just the end of the mechanical, forced-deleveraging selling and now comes the real action?

We do note that this morning’s open has seen more bond-AND-stock selling…

Having rebounded dramatically for the last six months, University of Michigan’s consumer sentiment index was expected to tumble notably in preliminary March data.

The headline UMich sentiment index was near its highest since 2000 in February, and has tumbled to 95.9 in flash March data (slightly better than the 95.0 exp) – the lowest since October, but ‘hope’ plunged:

• Current economic conditions index fell to 112.5 vs. 114.8 last month

• Expectations index fell to 85.3 vs. 92.1 last month

Source: Bloomberg

Buying Conditions, interestingly, improved across all areas…

Source: Bloomberg

65% of respondents believed the stock market will be higher in 12 months in February – near record highs – but that confidence crashed in March, tumbling 6.9 points to 58.7 – the biggest sentiment slump since August 2011 whenb S&P downgraded USA’s credit…

Source: Bloomberg

The survey conducted from Feb. 26 through late Wednesday evening captures a period that started with the virus beginning to spread across the country and culminated with the Dow Jones Industrial Average plunging into a bear market, the World Health Organization declaring a pandemic and President Donald Trump restricting travel from Europe.

“The initial response to the pandemic has not generated the type of economic panic among consumers that was present in the runup to the Great Recession,” , Richard Curtin, director of the University of Michigan consumer surveysaid in a statement.

“Nonetheless, the data suggest that additional declines in confidence are still likely to occur as the spread of the virus continues to accelerate.”

Curtin added that the figures suggest Americans’ early reaction to the public health crisis reflected a perception of the pandemic “as a temporary event.”

And as Rosenberg Research’s David Rosenberg warns, sentiment is about to get a lot worse:

“The big death rate headlines will likely hit consumer confidence very hard indeed and deepen an already likely deep recession and equity market collapse, potentially causing a significant backlash against the current U.S. administration.”

US equity futures are limit up this morning after an impressive rally from ugly depths during Asian trading overnight.

So, what, or who, is responsible for this massive comeback?

Admittedly – after the 5th worst daily drop in history of the S&P 500 – one might have expected a bounce…

But, as Nomura’s Charlie McElligott details below, there was an armada of stimulus plans suggested overnight to rescue the world (markets)…

As we have continued repeating, “The worse it gets, the larger the ultimate policy response” – and away we go, highlighted by German’s shock “fiscal” capitulation announcements happening real-time:

German FinMin Scholz unleashes the REAL bazooka today though, in a shocking FISCAL “whatever it takes” moment: *SCHOLZ SAYS POSSIBLE GERMANY WILL NEED TO TAKE ON ADDED DEBT*; GERMANY WILL HAVE NO LIMIT ON CREDIT PROGRAM FOR COMPANIES; SCHOLZ SAYS GERMANY WILL SPEND BILLIONS TO CUSHION ECONOMY; *GERMANY PLANS TO SET UP SAFETY NET FOR VIRUS-HIT COMPANIES; ALTMAIER: RESOURCES FOR GERMANY’S STATE BANK TO RISE TO 500BN

Treas Sec Mnuchin and House Dems reached an agreement last night to move forward with legislation that would shore up the US public health response to COVID-19, while also blunting some of the economic impact (h/t Rob Dent)

• Free COVID-19 testing, including for the uninsured

• Paid emergency leave for workers (14 days paid sick leave, up to three months paid family/medical leave)

• Enhanced unemployment insurance (increased access, waived requirements)

• Increased food assistance

• Increased federal funds for Medicaid

Yesterday’s Fed liquidity actions with the expansion of repo ops (beginning immed) and transition to “outright” QE (as previous “bill only” purchases expanded out across a range of maturities—thus, they are now explicitly buying Duration across nominal coupons, TIPS, FRNs and Bills) were introduced in an attempt to offset the obviously liquidity strains in the “frozen” Rates space, as evidenced by the moves in basis / off-the-runs this week

Further, given the deterioration of market conditions within Rates, I expect them to announce next week that they will effectively double the current monthly $notional purchases in an effort to soak-up some of this liquidity strain as OTR’s remain largely ‘bid-less’ and a large problem for both dealers and the leverage RV community alike

Lew’s new house-view is that the Fed will cut 100bps next wk, plus the aforementioned additional $50B of purchases on top of the current $60B plus the $20B from the MBS runoff reinvestments means a potential aggregate purchase of $130B / month from the Fed

• PBoC cuts RRR for some banks this morning, releasing $79B of liquidity

• ECB’s Villeroy—“We can distance ourselves from the capital key to purchase more of some countries debt if required”; ECB obviously too grew their QE yesterday as well

• EU President Von Der Leyen unveiling emergency measures to tackle the economic fallout, including flexibility on budgetary and state aid rules; 37B Euro fund for coronavirus support

• Italy may spend up to E16B on first stimulus

• BoJ ups bond buying overnight in unannounced move (offering to buy $1.9B), while sources story says that QE interventions will grow (e.g. Commercial Paper, ETFs, Corp Bonds)

• RBA added $5.5B of liquidity through daily repo ops, largest since at least ‘13

• South Korea banning short-selling for 6m; Italian CONSOB bans short selling; Spain’s CNMV banned short sales on 69 stocks which fell over certain amounts yesterday; UK’s FCA temporarily prohibits short selling in certain instruments; French watchdog also investigating short selling ban;

• Norges Bank cuts rates 50bps to 1%, is prepared to ease further; cuts countercyclical buffer to 1% from 2.5% with immediate effect

• Riksbank lends 0.5T crowns to safeguard supply of credit while Ingves states can buy local, govt and corp bonds, can do currency intervention & cut rates if we think it’s needed

• BoC injecting billions of cash with repo ops and is set to expand the scope of bond buybacks to add mkt liquidity

Finally, McElligott quotes Lenin:

“There are decades where nothing happens; and there are weeks where decades happen”

That seemed to sum things up extremely well.

 

We found it quite odd when, in the last week of February, JPMorgan – which just a few months earlier received a repo and “NOT QE” bailout for breaking the repo market – unexpectedly said it wanted to use the discount window again in hopes of breaching the stigma associated with the Fed’s liquidity facility that is best associated with the global financial crisis. Jennifer Piepszak, JPM’s CFO and the woman who certainly was involved in the bank’s decision to drain repo markets and eventually force the Fed to inject hundreds of billions in repo and QE4 funds thus ensuring JPM’s most profitable year on record, said the bank would borrow from the discount window from time to time this year and had discussed the plan with regulators. “We think this is an important step for us to take to break the stigma here.”

Two weeks later, we now know the reason behind JPM’s bizarre push to thaw use of the discount window: speaking to CNBC on Friday morning in an attempt to boost investor spirits and lift America’s confidence, Treasury secretary Steven Mnuchin urged banks to use the discount window, while noting that markets are working orderly and will stay open, while promising that markets and 401(k)s will be up a year from now and that “for long-term investors, this will be a great investment opportunity”.

The Treasury secretary also said that the government wants to help airline industry, and hinted that suspending student loan payments is among steps considered.

Zoom in. Steve Mnuchin calling. pic.twitter.com/wrwyF4dHx0

— Marc Baures. (@BauresMarc) March 13, 2020

More importantly, Mnuching said that “we’re very close to getting this done.” Treasury Sec. Mnuchin says negotiations between the White House and Congress on a coronavirus stimulus deal “are going very well.”

“I think we’re very close to getting this done.” Treasury Sec. Mnuchin says negotiations between the White House and Congress on a coronavirus stimulus deal “are going very well.” https://t.co/PSRrV2nmsB pic.twitter.com/xzI2gPnc9F

— CNBC (@CNBC) March 13, 2020

The punchline: when asked by Jim Cramer if he will guarantee to Americans that there will be liquidity in order to restore confidence, as was the case in 1987, Mnuchin said that 1987 was a “much scarier time” but he did indeed vow that “there will be liquidity available.“

“For long-term investors, this will be a great investment opportunity,” Treasury Sec. Mnuchin says, comparing the coronavirus sell-off with the 1987 market crash. https://t.co/NeZILPccez pic.twitter.com/yECA7U5d7p

— CNBC (@CNBC) March 13, 2020

The only problem is that as today’s massively underutilized repo operations showed, it may be the wrong kind of liquidity.

Here are all the key highlights from his CNBC interview below, courtesy of Bloomberg:

• MNUCHIN SAYS WAIVERS COMING TO HELP LIMIT VIRUS IMPACT
• MNUCHIN: MORE COMING TO BOOST LIQUIDITY
• MNUCHIN: WE WANT TO KEEP MARKETS OPEN
• MNUCHIN: MARKETS ARE WORKING ORDERLY
• MNUCHIN EXPECTS ECONOMIC REBOUND BY END OF YR
• MNUCHIN: SUSPENDING STUDENT LOAN PMTS AMONG OPTIONS CONSIDERED
• MNUCHIN: THERE WILL BE LIQUIDITY AVAILABLE

 

Authored by Bill Blain via MorningPorridge.com,

“Vulgar, but not a vulgar as Louis Vuitton, thought Sherman.”

Perhaps it’s time to think the unthinkable and close markets for a few weeks? 

Today we might be seeing a rash of desparate new efforts by central banks to promise liquidity to Treasuries, to pump money into stocks and shares in Norway and Japan… but you have to wonder what possible chance they have. It’s a long-held truism in FX markets that intervention only works when you intervene in the direction sentiment is heading. 

You can’t stem fear. 

The Virus, crowded hospitals, containment and social distancing are all going to happen – whatever we do. The crisis will top in a few weeks, maybe months, and then its pick-up the pieces. That’s a first order of business for new Bank of England Governor Andrew Bailey when he takes over on Monday? How to stem further panic? Good luck to him. Unfortunately, closing markets would probably just create even more negative consequences and value destruction as a tidal wave waits for the doors to re-open. There are still massive long positions that didn’t capitulate earlier – they are now irretrievably lost. 

The key drivers yesterday that spun rationale-thought into panic were multiple: 

• Virus fears have multiplied as quickly as infection rates across the Occident are rising – that’s made the Virus very real indeed. Fear and the Virus have both broken containment. Delay is the only theme. 

• Markets faith in Governments and the Authorities – particularly Trump and the ECB – to provide cover, has been shattered. They are variously accused in the press of incoherence, ineffectivness and being out-of-touch. Largard’s lack of experience came to the fore. Faith has gone. Worse – there are few signs industry leaders, regulators, central bankers and government are getting together to address this as happened in 2008. Who wants to be in Room with Trump’s lackeys? (Except here in the UK – where it looks much more joined up – but we are a small island in a raging sea.)

• All the signs from global commodities, trade, shipping etc point to massive economic slowdown and distress.

• We are now into stage 3 of crisis – imagining how markets might seize up further, panicking about chronic illiquidity in corporate bonds, and fearing even the most liquid markets like Treasuries could derail. 

In short. Its brutal out there.

Stocks are crashing rather than heading for any kind of landing – forget soft, the only issue is how hard. I am not surprised – read back through my Porridge Blogs this year, and trace the path. Now the indices could go much much lower: the slow motion market crash I’ve been talking about the last few weeks has now accelerated into a complete full-on meltdown. 

Asset Management next to fall

It means we are going to see crisis come home to roost in Asset Management sector. The last 13 years has seen a massive transfer of risk from banks to AM. That’s a lot of pain now on the books. It will come to the fore in coming days as funds are gated, massive losses announced, and Central Banks and the Authorities are forced to react. Might even be a bail-out or 100? So far there hasn’t been much hard stories (H2Ois one), but take a look at how much Blackrock is down since Mid-Feb – 33%. It’s the similar across the board. 

Trump’s ill-judged address to the Nation on Wednesday night, and his closing the door on Europe, will be remembered as the single most expensive speech in history. In 10 minutes, Trump’s stupid havering wiped more value out of savers pockets that ever before. Well done Genius. (Why were the British Isles not on the banned list? He owns Golf Courses in Ireland and Scotland.)

Christine Lagarde apparently threw Italy under the bus yesterday when she said is getting it in the eye this morning after telling us: “We are not here to close spreads”. There is an excellent take on this by Mark Gilbert and Marcus Ashworth, but  I’m not so sure she completely failed. She has illustrated the gap between what the ECB can do, and what the markets expect it can do. She can’t deliver the fiscal stimulus Europe desperately needs – that requires Brussels and Berlin to wake up. With Berlin scrabbling to succeed the Learesque-looking Merkel, this is going to be a typically European crisis response: The crisis will deepen, look insolvable, and at last moment just enough will happen, the ball will be kicked a bit further down the road, and Europe will struggle on the next nexus of crisis!

If you want to make money, keep shorting Italy, Portugal, Spain and Greece, but get ready to switch to long as pressure mounts, bailouts are mentioned, and Europe’s overriding imperative: “SAVE THE EURO AT ALL COSTS” comes into play. 

What we are seeing is Markets in action. We can panic, dither, laugh and fiddle as Rome burns around us, but… I’m watching, waiting and already seizing up the potential buy opportunities. There are going to be some superb opportunities. This is going to be an absolute golden-once-in-a-decade buying opportunity – when the dust and debris starts to clear.

Step bank, hunker down, get ready… 

There are going to be stumbles, but its interesting to watch what happens as China, its economy and its markets recover. 

If you want some ideas on what I’m personally looking at in terms of opportunity.. let’s chat. You know how to get hold of me. (Institutional investors only I’m afraid.) 

Meanwhile… the cost of Coronavirus:

I don’t know anyone who yet has the disease, but its already struck at the heart of family and friends. If it is hurting us, then the pain across the globe must be immense. 

My daughter’s dream job in fashion is about to go down the plug: they import fabric from Asia and have it made up in Italy. That ain’t happening now. Missed shipments and lockdown means they are about to miss delivering their biggest order of the year, and its cancellation will simply kill the business. They will be forced to pull the plug on staff today. If anyone wants a bright, fashion-savvy girl Friday who understands the business from the bottom up – get in touch..  

Meanwhile, chums from Scotland have spent the last 2 weeks cruising in endless circles round the Indian Ocean banned from stopping anywhere – they’ve just been dropped off early in the Gulf and making their own way home.  The cruising industry is finished – and it’s a major UK employer. A number of Flybe pilots in the area (Southampton is one if its bases) aren’t even trying to find new jobs as aviation collapses. Another works for Norwegian, and he has a baby on the way. Another chum runs an AirBNB service in London – and its collapsing. Two of my closest friends run businesses that are seeing contracts delayed or pulled.

And the virus hasn’t even really started. 

Director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, says he is ‘optimistic’ that the ongoing bottlenecks delaying coronavirus testing will be fixed.

Fauci acknowledged to ABC News that the government needs to do better to meet the flood of demand as COVID-19 begins to blanket the country.

“I mean, we have to admit that in the beginning we didn’t have what we needed, but now we will fix it,” he said.

According to Fauci, the earlier testing methods were ‘working’ during the initial outbreak, however the coronavirus task force led by Vice President Mike Pence is on track to provide a better system quickly.

“It’s going to be within the next week or two — probably even more like a week,” he said.

Fauci said that the diagnostic test used by the World Health Organization (WHO) wasn’t used because the US test was “one that had been working, and working well for the system that was involved.”

Authored by Paul Joseph Watson via Summit News,

The Mayor of Florence is facing fresh criticism after he encouraged Italians to “Hug a Chinese” as a stand against racism before Italy was later forced to quarantine its entire country because of the coronavirus.

The story is yet another illustration of how political correctness can actually sometimes be dangerous if not fatal.

Italy is now under a complete lockdown after the country was ravaged by coronavirus. Current figures show over 12,000 recorded infections with 827 deaths.

Many observers have criticized Italy’s left-wing government for not taking tougher measures earlier, but their reaction was significantly less embarrassing than how Mayor of Florence Dario Nardella responded to the outbreak.

Back in February, as the first cases of coronavirus were being recorded in Italy, Nardella launched an anti-racism hashtag campaign which translates as “hug a Chinese.”

“Half-empty Chinese restaurants, suspicious looks when you meet a Chinese on the street – maybe born and raised in Italy – psychosis when the bus neighbor sneezes, this is the effect of Coronavirus on the Italian population,” reported Newsly.it.

A video shows a Chinese man wearing a blindfold and a face mask in Florence asking for hugs. Numerous people embrace the man while some physically remove his blindfold and mask.

The Mayor even released a Twitter video of himself hugging an awkward-looking Chinese person to promote the campaign, which was launched to “stem the hatred” and “express solidarity with the Chinese community.”

#coronavirus: seguiamo le indicazioni delle autorità sanitarie e usiamo cautela, ma nessun terrorismo psicologico e soprattutto basta con i soliti sciacalli che non vedevano l’ora di usare questa scusa per odiare e insultare. Uniti in questa battaglia comune! #AbbracciaUnCinese pic.twitter.com/pUdqEl0piW

— Dario Nardella (@DarioNardella) February 1, 2020

Suffice to say Nardella is a member of the left-wing Democratic Party in Italy.

One wonders if he sees the empty streets in Florence and ponders whether his absurd campaign contributed to the current state of Italy.

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