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Six months ago, it seemed almost unimaginable that anything would replace Brexit as the biggest ambient risk for the UK economy. But after six deaths and hundreds of confirmed infections, the coronavirus has accomplished this seemingly impossible task. And after publishing a litany of screeds warnings about the impending Brexit fallout, the BoE decided to serve up a 50bp emergency rate cut to save the British economy from the looming viral threat.

Two days after UK stocks faced their worst shellacking since the financial crisis, the BoE slashed rates in what appears to be the first part of a one-two punch that will also include Boris Johnson’s first budget. Chancellor Rishi Sunak, who took over from his predecessor Sajid Javid just three weeks ago, has been thrust into the spotlight Wednesday morning as he prepares to unveil what’s become known as the “coronavirus budget”, according to the BBC.

During a post rate-cut press conference, BoE Governor Mark Carney said the coronavirus will cause “an economic shock that could prove large and sharp, but should be temporary.”

Carney also said the BoE is “coordinating actions with those to be outlined in the Chancellor’s budget later today.”

BOE Governor Mark Carney says coronavirus will cause “an economic shock that could prove large and sharp, but should be temporary”

More on U.K. emergency rate cut: https://t.co/xclCCZpQtu pic.twitter.com/qywT8ZGfzq

— Bloomberg Brexit (@Brexit) March 11, 2020

The cut – the largest since March 2009, when the British economy was still reeling from the financial crisis – reduced Britain’s benchmark overnight rate to just 25 basis points.

The BoE wasn’t alone on Wednesday: The Central Bank of Iceland lowered its benchmark interest rate by 50bps on Wednesday, bringing the bank’s 7-day term deposit rate to new all-time low of 2.25%.

Many who aren’t closely familiar with the BoE’s practices and traditions might find this strange, but outgoing Gov Carney on Wednesday also formally handed the reins to his successor, Andrew Baily. During Baily’s remarks, the new BoE governor said the central bank had used ‘roughly half’ of its policy ammunition on Wednesday, but caveated that this could change depending on how effective forward guidance is.

As FX analyst Viraj Patel pointed out, if Rishi’s coronavirus budget includes significant short-term support for workers and businesses, the UK will become the first developed country (ignoring China) to deliver a comprehensive economic response to the viral crisis (compare this to what’s going on in the US). He added that unlike the Fed, market’s are pricing in a “one and done” approach from the BoE

Markets pricing in very little additional stimulus from BoE now. Bank have been clear on ZLB being just above zero (anti-negative rates) which gives them little scope to cut further without changing their ZLB stance. With this floor – $GBP should stay supported as other CBs ease pic.twitter.com/8HKws6CENM

— Viraj Patel (@VPatelFX) March 11, 2020

The pound dipped on the news, but has since rebounded.

Democratic presidential frontrunner Joe Biden had a meltdown on Tuesday, telling a Detroit autoworker “You’re full of shit!” when he was accused of “actively trying to end our Second Amendment Right.”

“I support the Second Amendment,” said Biden, adding in an incoherent ramble: “The Second Amendment – just like right now, if you yell “fire,” that’s not free speech… From the very beginning, I have a shotgun, I have a 20-gauge, I have a 12-gauge, my sons hunt. Guess what, you’re not allowed to own any weapon.”

“I’m not taking your gun away, at all,” Biden continued – to which the man interjects “You were on video saying you were going to take our guns away,” to which Biden replies “I did not say that.”

“You did! It’s in a viral video!” the man claps back.

Then Biden says “Wait, wait, wait, wait, I’ll take your AR-14s” – a gun which doesn’t exist.

Watch:

Wow. The Biden video from this morning – up close – is worse than previously imagined.

I wonder if @DavidAFrench and @davidfrum still think this is a win for the Biden camp.

pic.twitter.com/a0PCy1TalX

— Pete D’Abrosca (@pdabrosca) March 10, 2020

“Don’t be such a horse’s ass,” @JoeBiden says after the man continued to yell at him.

— Bo Erickson CBS (@BoKnowsNews) March 10, 2020

Hilarious.

People are probably fine with Biden switching his platform to grabbing AR-14s. I don’t think people will complain much.

— Erielle Davidson (@politicalelle) March 10, 2020

Meanwhile, Biden did threaten to take your guns.

Yes, Biden has promised to “Ban the manufacture and sale of assault weapons and high-capacity magazines” if electedhttps://t.co/xUMRg7ce5f

— Charlie Spiering (@charliespiering) March 10, 2020

And he wants to put Beto O’Rourke in charge of it.

Joe Biden says Beto “Hell Yes, We’re Going to Take Your AR-15” O’Rourke will “take care of the gun problem” for him.

Don’t be fooled: Joe Biden isn’t any less radical than the rest of them. pic.twitter.com/tVpGCMmy9n

— Steve Scalise (@SteveScalise) March 3, 2020

Perhaps this explains why Joe received some unexpected pushback on his designs. 

“Trump! Trump! Trump! Trump! Trump! Trump!”

Detroit auto workers shouted their support for President @realDonaldTrump during Joe Biden’s plant visit. pic.twitter.com/AxvasJCFCR

— Trump War Room – Text EMPOWER to 88022 (@TrumpWarRoom) March 10, 2020

As Covid-19 grinds the world’s economy to a halt and supply-chains break, anxieties flourish among multinationals, AP news reports.

Millions of businesses are reeling from virus impacts as supply-chain disruptions have triggered one of the most massive economic shocks since the last financial crisis. 

Jay Foreman, CEO of the toy company Basic Fun in Boca Raton, Florida, told AP that his Chinese suppliers have dramatically reduced output because of the shutdowns, and this means his imports are significantly reduced. Foreman said he would layoff 10% of his 175-person global staff.

“I am getting vendors who are actually encouraging me to (make smaller) orders because they’re trying to spread out the capacity,” Foreman said. “I don’t want lower orders. I want higher orders.”

Sondra Mansfield, who owns Chalk of the Town in New York City, which makes T-shirts and tote bags, told AP that the “virus is going to go on, and it’s going to impact a lot of countries and economies.”

Mansfield stressed her access to foreign suppliers has come to a pause, and that could start affecting US operations.

“I think it will get worse before it gets better,” she warned.

Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, said the fast-spreading virus is now becoming a global issue.

The virus has now spread across South Korea, Japan, Iran, Italy, other countries in Europe, and the Americas, with the possibility of a “global pandemic” in the near term.

Last month Michael Every of Rabobank laid out his four scenarios for the virus’ economic and market impact: “The Bad,” “The Worse,” “The Ugly,” and “The Unthinkable.”

In an updated post on March 4, Every said, “It’s Getting ‘The Ugly,'” as this scenario foresees “the US, UK, and Europe were infected too. Naturally, this implied a deep global recession.” It appears the world is just one step away from “The Unthinkable,” Every describes this scenario as a global pandemic that has only been seen in Hollywood movies.

We’ve laid out four scenarios of how the virus impact could affect the global economy. At the moment it appears scenario four could be playing out, indicating a massive economic shock could tilt the world into recession. Global growth rates could be headed to zero on the year with a $2.7 trillion hit in global output.

Business travel across the world has crashed. Big tech firms, including Amazon, Google, Apple, Microsoft, and others, have restricted employees from traveling overseas. Many of these employees are being sent home for the next month. Similar restrictions are being seen with major US banks. As a result of reduced travel by corporate America and consumers as a whole, the travel industry is headed for a crash, which means airlines, hotels, restaurants, cruise ships, and casinos are going to see a sharp decline in traffic for the next several months. 

Executives of Salus Brands, an Arizona-based company, that sells swimming-pool accessories, said its Chinese shipments for the summer vacation season will likely be missed.

“If we can’t get the product in stores by Memorial Day week or shortly after, we lose our season,” said Salus Brands CEO Dave Balkaran.

Andrew Shoyer, a former US trade official who is a partner at the law firm Sidley Austin, said the “small and medium-sized enterprise will get hurt the most and the soonest.” He noted larger companies are more flexible with larger stockpiles of goods and can easily switch suppliers. 

We’ve noted on several occasions that West Coast port activity has plunged over the first quarter. Specifically, year over year volume at the Port of Los Angeles, the busiest seaport in the US – could see upwards of a 15% decline this quarter. 

And to make matters worse for companies already suffering from supply shocks, the next shock could be a demand one. The director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, recommended all baby boomers on Sunday to avoid travel and large crowds in the US. This would effectively mean that one of the wealthiest generations could be removed from spending money in the economy as the virus outbreak worsens in the weeks ahead. 

Authored bv Paul Joseph Watson via Summit News,

Video out of Greece shows a farmer on a tractor using a water cannon to repel migrants who are trying to break through the border.

Migrants are attempting to set fires under metal border fencing so they can weaken it.

Migrants setting fires along the Greek border fence to weaken the metal so that they will be able to break through and storm the border of Greece/Europe/Christianity pic.twitter.com/pnSjeggiP4

— BasedPoland (@BasedPoland) March 9, 2020

However, as part of the wider people’s revolt against yet another incursion on the border, one Greek farmer fought back by dousing the migrants with water, driving the migrants away from the fence.

The water also wets the ground, making it harder for migrants to start fires.

Greek farmers have started spraying the migrants trying to storm the Greek border fence from their tractors

I’m not sure what they are spraying with

Some say its pig urine, other say its pesticides

Can anyone from #Greece confirm what the farmers are using?

Vid: @akrokentrwos pic.twitter.com/fL8Gk8jn2n

— BasedPoland (@BasedPoland) March 8, 2020

Last month, President Erdogan announced that Turkey would be re-opening its border and encouraging millions of migrants to invade Europe.

Thanks to a strong response from Greek security forces and a massive revolt by the Greek people, there has been no repeat of 2015, when up to 2 million migrants eventually reached Europe.

*  *  *

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Italy has suspended payments on mortgages due to the coronavirus outbreak as more than 9,000 people have been infected and over 460 have died, the government announced on Tuesday.

When asked about halting mortgage payments on Radio Anch’io, deputy economic minister Laura Castelli said “Yes, that will be the case, for individuals and households,” according to The Independent.

Meanwhile, panicked residents crammed into supermarkets to stock up as the entire country entered a lockdown on Tuesday morning, while Italian streets were virtually empty after the government ordered people to avoid travel except for “urgent, verifiable work situations and emergencies or health reasons,” according to the Daily Mail.

Tourist favourites including Milan’s shopping galleries, Rome’s Spanish Steps and Vatican’s St Peter’s Square were all but deserted today after the drastic coronavirus measures were extended to the entire country last night.  

Panic-buyers were packing into supermarkets this morning with queues stretching outside because of a rule that demands a 3ft gap between shoppers – meaning only a limited number can go inside at once. 

In Naples, police were roaming the streets with a loudhailer last night to warn people to ‘stay indoors, avoid unnecessary outings and avoid crowded places’ because of the ‘coronavirus emergency’.  

Prime minister Giuseppe Conte declared last night that ‘everyone must give up something to protect the health of citizens.’ –Daily Mail

Businesses are obviously suffering from the impact of the lockdown, as the empty streets of Rome have turned quiet. Bars and restaurants are only allowed to be open between 6am and 6pm, and must keep customers a minimum distance of 1 meter (3.2 feet) apart, according to SBS. Moreover, museums and cultural venues are closed, along with nightclubs, cinemas, theaters and casinos. Department stores must close on public holidays and the day before public holidays.

The flow-on effect has been immediate.

Raffaello Sasson’s family has owned a clothing shop in Rome since 1970 but he says conditions have never been so dire.

“This is right now much worse than 11th of September and Chernobyl put together. This is the worst we have seen, right now.” –SBS

“The last two weeks have been tragic, in the historic centre here, not even a single tourist. We have been here for 15 years and it’s never happened,” said restaurant owner Francesco Massotte, whose high-end eatery typically books people months in advance.

Outside Trevi Fountain, tourists saw signs warning of interactions with others.

“I was eating lunch today and in the restaurant, there was a sign saying ‘stay away from people, sit a metre away from other people’,” one man told SBS.

At least they won’t have to pay their mortgages for a while.

Authored by Patrick Buchanan via Buchanan.org,

“Fortress Europe is an illusion.”

So declares the Financial Times in the closing line of its Saturday editorial: “Europe Cannot Ignore Syrian Migrant Crisis.”

The FT undertakes to instruct the Old Continent on what its duty is and what its future holds:

“The EU will face flows of migrants and asylum seekers across the Mediterranean for decades to come.”

Can Europe not repel this unwanted home invasion from the Global South?

It is “delusional” to think so, says the FT. Europe must be realistic and set about “providing legal routes for migrants and asylum seekers.”

What occasioned the editorial was Greece’s rough resistance to Turkish President Erdogan’s funneling of thousands of Syrian refugees, who had fled into Turkey, right up to the border with Greece.

Erdogan is threatening to inundate southeastern Europe with Syrian refugees to extract more money from the EU in return for keeping the 3.5 million Syrians already in Turkey away from EU frontiers.

Another Erdogan objective is to coerce Europe into backing his military intervention in Syria to prevent President Bashar Assad from capturing all of Idlib province and emerging victorious in his civil war.

In the human rights hellhole that is Syria today, we may see the dimensions of the disaster wrought when Wilsonian crusaders set out to depose the dictator Assad and make Syria safe for democracy.

A brief history…

When the Arab Spring erupted and protesters arose to oust Assad, the U.S., Turkey and the Gulf Arabs aided and equipped Syrian rebels willing to take up arms. The “good rebels,” however, were routed and elements of al-Qaida soon assumed dominance of the resistance.

Facing defeat, Syria’s president put out a call to his allies — Russia, Iran, Hezbollah — to save his regime. They responded, and Assad, over four years, recaptured all of Syria west of the Euphrates, save Idlib.

There, the latest fighting has pushed 900,000 more refugees to Turkey’s southern border.

The 21st-century interventions and wars of the West in the Islamic world have not gone well.

George W. Bush was goaded into invading Iraq. Barack Obama was persuaded to overthrow Colonel Moammar Gadhafi in Libya and the Assad regime in Damascus. Obama ordered U.S. forces to assist Saudi Crown Prince Mohammed bin Salman in his war to crush Houthi rebels who had ousted Riyadh’s resident puppet in Yemen.

And what has the West reaped from our Mideast wars?

In Syria and Yemen, we have helped to create two of the world’s greatest human rights disasters.

In Libya, we have a new civil war.

In Iraq, we now battle Iran for influence inside a nation we “liberated” in 2003

In Afghanistan, we have concluded a deal with our enemy of two decades, the Taliban, that will enable us to pull our 12,000 troops out of the country in 14 months and let our Afghan allies work it out, or fight it out, with the Taliban. America is washing its hands of its longest war.

In five wars over 20 years, we lost 7,000 soldiers with some 40,000 wounded. We plunged the wealth of an empire into these wars.

And what did these wars produce for the peoples we went to aid and uplift, besides hundreds of thousands of dead Afghans and Arabs and millions of people uprooted from their homes and driven into exile?

Now, Europe is being admonished by the FT that, having done its duty by plunging into the Mideast, the continent has a new moral duty to take in the refugees the wars created, for decades to come.

But if the EU opens its doors to an endless stream of Africans and Arabs, where is the evidence that European nations will accept and assimilate them?

Will these migrants and asylum seekers become good Europeans? Or will they create in the great cities of Europe enclaves that replicate the conditions in the African and Middle East countries whence they came?

The history of the last half millennium tells the story of the rise and fall of a civilization.

In the 16th, 17th and 18th centuries, Spain, Britain, France and Portugal, and then Belgium, Italy, Germany and America, all believing in the superiority of their civilization, went out into the world to create empires to uplift and rule what Rudyard Kipling derisively called “the lesser breeds without the law.”

After two world wars, the rulers of these empires embraced a liberalism that now proclaimed the equality of all peoples, races, creeds, cultures and civilizations. This egalitarian ideology mandated the dismantling of empires and colonies as the reactionary relics of a benighted time.

Now the peoples of the new nations, dissatisfied with what their liberated lands and rulers have produced, have decided to come to Europe to enjoy in the West what they cannot replicate at home. And liberalism, the ideology of Western suicide, dictates to Europe that it take them in — for decades to come.

The colonizers of yesterday are becoming the colonized of tomorrow. Is this how the West ends?

Industry sources told Reuters on Tuesday that global luxury brands, including Louis Vuitton, Parada, and others, have significantly reduced orders with top Italian suppliers as Covid-19 disruptions are seen across the world.

Italy has imposed unprecedented travel restrictions on 60 million of its people to contain the fast-spreading virus, which has so far resulted in 9,172 confirmed cases, with 463 deaths.

Reuters spoke with high-end clothing suppliers in Veneto, an area nearby Tuscany and affected by the new travel restrictions. Suppliers said a perfect storm of factors has been building since late January, as demand for luxury goods from China crashed, and Italian suppliers are suspending operations or running at less than full capacity because of a nationwide lockdown to contain the virus.

“We were producing 800-1,000 handbags a month for Gucci. In February we made 450 and we have no orders for March,” said the operator of a small handbag supplier in Scandicci, an area outside Florence that is home to a major hub for leather goods production. “We don’t have orders for April or May either. The company has been brought to a standstill and we are having to put our workers on temporary redundancy schemes.”

The virus has severely damaged the global luxury goods industry, already dealing with waning demand that started with the Hong Kong riots in the second half of 2019. Then the virus outbreak in China at the start of the year delivered an even larger blow to the industry as the world’s largest consumer was forced into quarantine.

Flavio Cereda, an industry analyst at Jefferies, noted on Monday that he slashed his 2020 sales forecast for the global luxury goods market because of the virus outbreak in China, the Middle East, Europe, and the Americas.

Cereda expects luxury goods sales will decline 3% on the year, as opposed to his earlier forecast of 1% growth.

“Prolonged disruption of economic activity may well result in supply chain issues for most brands,” he said, adding, however, that he had no evidence of that happening yet.

The Scandicci manufacturing hub is an area home to top suppliers for LVMH, Kering, and Prada has had strict travel restrictions go into effect to start the week, which has forced some companies to operate at less than full capacity.

Massimiliano Guerrini is the owner of Almax, a Scandicci-based luxury goods supplier for top luxury brands, said orders noticeably decreased when China started shutting down in late January due to the virus outbreak.

“I thought things were not too bad given the circumstances, but now this new alarm in Italy risks making more casualties among businesses than among people and disrupting the supply chain for the orders that are still in the pipeline,” he said.

“We have 270 employees and have diversified our customers, so we managed to mitigate the impact so far. But some of the smaller suppliers are not going to make it.”

Reuters spoke with an operator of another supplier in Veneto, who reported a 30% slump in orders from Louis Vuitton.

Claudio Marenzi, President of Confindustria Moda, a trade organization in Italy, said the Italian textiles industry could see rapid consolidation this year as the virus crisis across the world is causing severe demand shocks that are also resulting in supply shocks as suppliers in Italy idle plants on a nationwide lockdown.

“Since the virus emerged in China we knew there was going to be a slowdown in the first quarter. But now the whole year risks going up in smoke for us,” Marenzi said.

Italy is Europe’s third-largest economy, and the lockdown across the country could result in a recession.