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Banks around the world are supposed to benefit the most from central banks inflating assets, and hyperinflating stock markets, but over the past few years, central banks have instead caused some of the biggest bank job cuts in half a decade. 

HSBC, Europe’s largest bank and troubled lender, although not nearly as troubled as Deutsche Bank, said it would cut upwards of 35,000 jobs, shed $100 billion in assets, and take a massive $7.3 billion hit to goodwill as part of a major overhaul under Chairman Mark Tucker, the company said in a press release on Tuesday morning.

This comes months after HSBC’s interim CEO Noel Quinn unveiled plans to “remodel” large parts of the bank. The restructuring of the London-based bank is being led by Quinn, who replaced John Flint in August on an interim basis. Quinn is vying for the permanent role of CEO, which the bank said will be decided this year.

Europe’s biggest bank by assets is expected to focus more on Asia and the Middle East, while it winds down operations in Europe and the US; HSBC derives at least 50% of its revenue in Asia. The bank said net profit plunged 53% to $5.97 billion last year, due to the $7.3BN goodwill hit and also thanks to the record low interest rates and NIRP unleashed by central banks.

Tucker said the bank faces substantial challenges in the UK, Hong Kong, and mainland China. He also issued a warning over the Covid-19 outbreak in China and quickly spreading across Asia to Europe, indicating that the virus could impact the bank’s performance this year.

Quinn confirmed the bank would cut 15% of its workforce over the next two-three years. This is on top of the 10,000 jobs it axed in Oct.

“The totality of this program is that our headcount is likely to go from 235,000 to closer to 200,000 over the next three years,” Quinn told Reuters. adding that “HSBC will be “exiting businesses where necessary.”

“Around 30% of our capital is currently allocated to businesses that are delivering returns below their cost of equity, largely in global banking and markets in Europe and the U.S.,” he noted.

In its long-struggling U.S. arm, Quinn said HSBC will cut assets in investment banking and markets by almost half, and shut around 70 of its 229 branches. As of September, HSBC was the U.S.’s 14th largest commercial bank according to Federal Reserve data, with around $181 billion assets. Mr. Quinn said he had considered putting the unit up for sale but decided against it because the U.S. is a crucial part of the bank’s global network.

HSBC shares slid 6% on the restructuring news on Tuesday morning:

The benefits of the restructuring will be evident largely from 2023 onward, said Citigroup analyst Ronit Ghose, who recommended investors sell HSBC shares.

And to think it was only last year when 50 banks laid off 77,780 jobs, the most since 91,448 in 2015. 

With the global economy quickly decelerating, and a virus shock that could tilt the world into recession, if we had to guess, tens of thousands of more banking jobs will be slashed this year.

Last night, the western press exposed the Americans for breaking Japan’s quarantine on the ‘Diamond Princess’ by ferrying some 14 infected individuals to the US. But with one day left to go before the Japanese government ends its quarantine and releases thousands of terrified and paranoid passengers into the streets of Tokyo.

On Tuesday, another 88 passengers from the Diamond Princess were diagnosed with the virus, bringing the total to 542.

#BREAKING: Another 88 confirmed new #coronavirus cases from on board the Diamond Princess @abcnews pic.twitter.com/Ixp1XdpY0x

— Jake Sturmer (@JakeSturmer) February 18, 2020

Japan has completed tests for all passengers and crew aboard the ship as of Monday, but the results for the last batch of tests aren’t expected until Wednesday, the day that the quarantine is slated to end. So far, results are back for 2,404 passengers and crew, out of the 3,711 who were  on board the ship when the quarantine began on Feb. 5.

Japanese Health Minister Katsunobu Kato said Tuesday that people who have tested negative for the virus would start leaving on Wednesday, but that the process of releasing passengers and crew won’t be finished until Friday, according to the Washington Post.

Elsewhere, Japan confirmed three more cases of the virus. This time, they were confirmed in Wakayama, a prefecture in eastern Japan.

In the latest indication that the 14-day quarantine simply wasn’t enough to kill the virus, a British couple has tested positive for the virus just one day before Japanese authorities are set to release everybody from quarantine, according to the Guardian.

“David and Sally Abel, a British couple onboard the Diamond Princess cruise liner in Japan, have tested positive for coronavirus, a day before passengers who tested negative were due to start leaving the ship after spending two weeks in quarantine.”

Including all of the cases announced overnight, there are now 73,336 confirmed cases of the virus worldwide, compared with 1,874 deaths.

In Beijing, senior officials including President Xi continued to play down the economic blowback from the virus. During remarks on Tuesday, Xi insisted that China could still meet its 2020 economic targets – which called for a doubling of the size of the Chinese economy in 10 years – despite the outbreak.

We cross live to the Chinese Statistics Bureau as President Xi says China can still meet 2020 economic targets despite coronavirus pic.twitter.com/JJeqvbWJCZ

— RANsquawk (@RANsquawk) February 18, 2020

Moving south to Seoul, South Korean President Moon Jae-in called for South Korea to take “emergency steps” to prepare for a more widespread outbreak of COVID-19.

In contrast to Xi, Moon warned the coronavirus could have a “bigger and longer-lasting impact” on his country’s economy than the 2015 MERS outbreak, which prompted South Korea to roll out a supplemental budget while the central bank cut rates, WaPo reports. Speculators are now betting on a rate cut at the Bank of Korea’s meeting next week. Singapore also announced on Tuesday that it had earmarked $2.8 billion for virus relief measures to help stabilize its economy and assist workers.

Over in the Philippines, 25,000 stranded workers can now return to work.

French Health Minister Olivier Veran said Tuesday there was a “credible risk” that the virus could transform into a pandemic, Reuters reports.

“This is both a working assumption and a credible risk,” Veran told France Info radio, when asked about the possibility of the coronavirus spreading globally.

Taking a brief break from the news, our disturbing video of the day comes from Xinjiang, the far-flung province that’s home to millions of Uyghur Muslims.

In this video, shared by the Epoch Times’ Jennifer Zeng, a police officer suddenly collapses while walking. His current status is unknown.

Zhou Shunxin, a police officer in #Xinjiang, suddenly collaspes while walking. Officail report says vaguely that he “passed out” at the frone line of #COVID2019 control, and sent to the hospital, but doesn’t talke about why he collasped or his current status. #Coronavirus pic.twitter.com/CYfUi259Pt

— 曾錚 Jennifer Zeng (@jenniferatntd) February 18, 2020

Offering a lesson in contrasts, the Global Times, a mainland tabloid, has continued to tweet lighthearted human interest stories from the heart of the outbreak. Today’s story: A health-care worker getting married in the heart of the outbreak.

Wedding dress, bridal veil and confetti made from a hospital bedsheet with a rubber glove bridal bouquet. Watch this medical staff member’s wedding in the battleground against the novel #coronavirus in #Wuhan. https://t.co/GwDguZKfe0 pic.twitter.com/BZt3KprGAI

— Global Times (@globaltimesnews) February 18, 2020

Since we haven’t reported a full breakdown of cases in a while, here’s a complete list and breakdown of infections by country and territory, courtesy of the AP:

Mainland China: 1,868 deaths among 72,436 cases, chiefly in Hubei
Hong Kong: 58 cases, 1 death
Macao: 10
Japan: 607 cases, including 542 from a cruise ship docked in Yokohama, 1 death
Singapore: 77 cases
Thailand: 35
South Korea: 31
Malaysia: 22
Taiwan: 22 cases, 1 death
Vietnam: 16 cases
Germany: 16
United States: 15 cases; separately, 1 US citizen died in China
Australia: 14 cases
France: 12 cases, 1 death
United Kingdom: 9 cases
United Arab Emirates: 9
Canada: 8
Philippines: 3 cases, 1 death
India: 3 cases
Italy: 3
Russia: 2
Spain: 2
Belgium: 1
Nepal: 1
Sri Lanka: 1
Sweden: 1
Cambodia: 1
Finland: 1
Egypt: 1

Authored by Julian Lee, op-ed via Bloomberg,com,

The Covid-19 virus is a human tragedy for many who have been affected by it and it’s having a profound impact on the lives of a large part of the Chinese population. The impact on the rest of the world of the disease’s dislocation of the Chinese economy is yet to be fully felt. Forecasts of only a modest impact on oil demand worldwide are far too optimistic.

A comparison of the latest forecasts from the world’s three big oil agencies – the International Energy Agency, the U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries – highlights the huge uncertainty that exists over the virus’s repercussions for oil demand. As may be expected for a body representing oil producers, OPEC sees the impact as minimal, having just cut its first-quarter forecast for global oil demand by only 400,000 barrels a day. That looks like wishful thinking. The IEA’s revision is three times as big, and if its forecast bears out, it’s deep enough to tip the world into its first year-on-year drop in demand in more than a decade.

^{Demand Revisions}

The IEA has slashed its 1Q20 global oil demand forecast by 1.3 million barrels a day – three times as much as the revision made by OPEC

China’s own oil consumption is down sharply as factories stay closed and travel restrictions remain in place even after the extended Lunar New Year holiday comes to an end. Congestion on roads in major cities is far below normal levels. The chart below shows journey times in Shanghai, and other Chinese cities mirror that pattern. My colleagues at BloombergNEF estimate that China’s jet fuel use is now down by 240,000 barrels a day from pre-virus levels, with departures from Chinese airports down by around 80%.

Empty Roads

Roads in Shanghai remain empty even after the extended Lunar New Year holiday ends; the pattern is similar in other cities

Pollution statistics also capture the slowdown in economic activity and fuel use — something that under different circumstances might be reason to celebrate. China’s nitrogen dioxide emissions fell 36% in the week after the holiday from the same period a year earlier, according to the Centre for Research on Energy and Clean Air. A slowdown of 25%-50% across industrial sectors such as oil refining, coal-fired power generation and steel production contributed to the drop, according to the independent research organization.

However, even as the Covid-19 virus hits consumption, the number of very large crude carriers hauling cargoes to China has risen. That’s because independent refiners are taking advantage of the drop in crude prices to fill their storage tanks with cheap cargoes, even as they cut run rates. That’s to some extent cushioning producers now. But those stockpiles will hit future demand for crude from China’s teapot refineries, even after the immediate effect of the virus dissipates.

Crude to China

More supertankers are sailing to China despite the slowdown in consumption

Source: Bloomberg

At the same time, the Chinese government is in the process of building and filling a strategic stockpile similar to the U.S. Strategic Petroleum Reserve, as it becomes ever more dependent on imported supplies. It may also be using the price drop to boost purchases for long-term storage, raising the risk that it will cut them again as prices recover, crimping demand for imported oil in the future. By contrast, China’s state-owned processors are seeking to reduce the volumes supplied under term contracts.

Even with reduced refinery runs, China is producing more fuel than it needs. Exports of gasoline and diesel have soared, according to shipping intelligence firm Vortexa. But they aren’t finding ready buyers. Most of these additional fuel exports are ending up in storage tanks in Singapore amid subdued regional demand.

That brings us back to concerns over just how bad the reverberations from Covid-19 will be. The China of 2020 is very different to that of 2003, and so today’s epidemic is likely to have a much bigger international impact than the SARS virus to which it is most often compared. For a start, China’s oil consumption now is more than twice what it was when SARS hit and last year the country accounted for more than three-quarters of the growth in global oil demand, according to the IEA.

In the past 17 years, China has also become much more closely linked to the rest of the world economy. Chinese travelers accounted for about 20% of total spending on tourism in 2018, according to the United Nations World Tourism Organization, while China itself was the fourth most popular destination. The virus will effect both of those figures in 2020.

The country has also become the center for producing and exporting both finished goods and components. “All the signs are that there has been a major dislocation in global supply chains,” according to Caroline Bain, chief commodities economist at Capital Economics. For some products, “it’s only going to get worse in February data.” 

Lack of parts from China has already forced Hyundai Motor Co. and Kia Motors to halt some car production temporarily in South Korea, while Fiat Chrysler Automobiles NV plans to do the same in Serbia. Just-in-time supply chains are starting to show their fragility. There will be more to come as shipments from Chinese ports continue to suffer delays. South Korea’s government says economic impact from the virus is “unavoidable.” The impact won’t stop at South Korea.

In that light, OPEC’s forecast that global oil demand will be cut by just 440,000 barrels a day in the first quarter and by 230,000 barrels a day over the year as a whole looks like wishful thinking on the part of producers. It is doing them no favors, though. A delay in reducing supplies will only make the cuts needed later even deeper.

A German court ruled this week that Elon Musk must halt his plan to clear a forest near Berlin in order to build Tesla’s German Gigafactory. The court put the stay on Tesla while it considers challenges from environmentalists, according to Bloomberg. 

That’s right – Tesla was cutting down a forest to put up an EV factory – this is environmentalism in 2020. 

The court issued an injunction against further construction after it overturned a lower court’s ruling against environmental group Gruene Liga Brandenburg, who is looking to prevent Tesla from clearing the forest. The court is expected to render a final decision on the complaint in several days. 

Joerg Steinbach, spokesman for the regional government said: “Tesla and the local government have already filed their response to the complaint and are now relying on the prompt decision of the court.”

Tesla has already cleared about “150 soccer fields” worth of forest and has been forced to relocate several species of animals, while also considering the breeding periods of local wildlife.

Recall it was about one month ago that we first reported Tesla was cutting down “thousands of trees” in order to make space to erect its German Gigafactory. 

The company was tasked with clearing so much forest space to put up its factory that dozens of protesters recently organized a gathering known as a “Forest Walk” to protect against Tesla’s tree removal activities at the site, according to Teslarati. 

The protesters were dressed in yellow vests, replicating the “Yellow Vest Movement” in France and are also concerned about what the deforestation may do to the drinking water in the area. 

Authored by Patrick Cockburn via Counterpunch.org,

“People wanted to kick the government and Sinn Fein provided the shoe to do the kicking,” says Christy Parker, a journalist from the beautiful but de-industrialised town of Youghal in county Cork. He speaks of the “chasm” between the elite benefiting from Ireland’s impressive economic progress and the large part of the population that has been left behind.

Youghal never recovered from the loss of its carpet and textile factories that flourished when I grew up there in the 1950s and 1960s. Today, surveys show that many of its people still yearn for the return of the factories that once provided good jobs. One can see why: the main street is today lined with closed shops, though the cost of renting a flat is high and has doubled over the last eight or nine years.

The town is one of many places in Ireland untouched by the original Celtic Tiger or the economic recovery from the 2008 recession. “Every week people are hearing some new shocking story about the homeless trying to live off food banks somewhere in the country,” says Parker.

I have heard exactly the same phrases being used in the UK to explain why people voted for Brexit. In former coal mining and steel making towns in the Welsh Valleys, I was told that they felt betrayed by everybody in authority from the Welsh Assembly in Cardiff to Westminster and Brussels, “but it was the EU against which people decided to push back.” A man from Walsall said that people there did not care if the GDP of the UK went up or down after Brexit, because they did not consider it “to be their GDP”.

The general election on 8 February was Ireland’s “Brexit moment” when a wide variety of establishment chickens came home to roost, as many voters expressed deep dissatisfaction with the status quo. An exit poll showed that 63 per cent of voters believed that they had not benefited from recent economic improvements.

Politicians and commentators on all sides confirmed the exit poll evidence that the issues which mattered most to voters were health care, housing and homelessness. This is true but tends to obscure the fact that in Ireland, as in the UK and US, voters chose a vociferously nationalist party as the vehicle through which they expressed their rejection of the status quo. In Ireland, Sinn Fein stumbled on a winning political formula whose potency it at first underrated but raised its share of the vote from 9.5 to 24.5 per cent between disastrous local council elections last May and the triumphant general election nine months later. The change in the party’s political prospects may have been astonishing, but nobody believes them to be a flash in the pan protest vote. There is a general assumption that, if there is another general election, and Sinn Fein makes no calamitous mistakes, the party will field enough candidates, as it failed to do this time around, and will win a more complete victory.

The motives of the Irish voters may have been social and economic, but the fact that a quarter of them plumped for Sinn Fein will have a profound influence on Northern Ireland and Ireland’s relations with Britain. For the first time a single party, Sinn Fein, will be politically powerful on both sides of the border, a partner with the DUP in Belfast and potentially either a leading partner in the next Irish government in Dublin or the main opposition to it. This creates a degree of de facto Irish unity never experienced before and will be deeply resented by unionists who see the balance of power swinging against them.

Sinn Fein’s political dominance in the nationalist/Catholic community in the north, that had been showing signs of faltering, will be reinforced. But the unionist/Protestant community, which last year saw Boris Johnson renege on his promises of support, by agreeing to a customs barrier separating Northern Ireland from the rest of the UK, is feeling the ground beginning to give way under its feet.

Brian Feeney, a columnist for the Irish News in Belfast, says history shows that northern nationalists “like republican politics, but they don’t like republican violence”. Destabilisation is most likely to come from the unionist side and a sign of this may be hoax bomb threats against nationalist targets in Belfast in recent days.

A further cause of instability is the British government itself: the highly regarded Northern Ireland Secretary Julian Smith was summarily dismissed in the cabinet reshuffle this week, despite winning plaudits from all sides for brokering the power-sharing deal between Sinn Fein and the DUP that reopened the assembly at Stormont. Smith’s was reportedly sacked due to pledging to investigate alleged crimes committed by British soldiers during the Troubles.

Getting rid of Smith may be an early sign that, under Johnson, English nationalist sensitivities will get priority over keeping Northern Ireland stable. The arrogance and ignorance of Brexiteers when it comes to Ireland has infuriated Irish opinion over the last few years with the Home Secretary Priti Patel famously suggesting that the Irish, who have vivid memories of the Great Famine, could be starved into making concessions.

Voters say that Brexit was not a significant influence on the way they cast their vote in the election, probably because they wrongly supposed that the problem was solved. But Ireland remains the EU’s front line state, which gives it influence in Brussels but ensures constant friction with the UK.

From Sinn Fein’s point of view, it has been a successful 40 years’ march since it first started winning elections during the hunger strikes of 1980/81 as Daniel Finn describes in his important book One Man’s Terrorist: A Political History of the IRA. The initial slogan was that “Will anyone here object if, with a ballot box in this hand and an Armalite in this hand, we take power in Ireland?” These are not words that Sinn Fein’s many enemies are likely to allow it to forget, but during the election campaign just finished, Fine Gael and Fianna Fáil claims that the shadow of the gunman still tainted Sinn Fein were mostly ignored. The accusation may resonate with older voters, but not with younger ones with no experience of “physical force” republicanism.

Constitutional action has worked too well for Sinn Fein to try anything else. It has also cut the ground from under dissident republicans seeking to return to violence. Northern nationalists know that demographic change is propelling them towards a voting majority. In the south, they are no longer hobbled politically by memories of The Troubles.

Sinn Fein may well congratulate itself that years of struggle have produced its present successes. But it has also been extremely lucky: after trying and failing to make Irish partition an international issue for almost a century, the Brexit vote in 2016 automatically did so by potentially turning the border into an international frontier between the UK and the EU. Sinn Fein chose the right issues on which to campaign in the general election, but it was also the almost accidental beneficiary of disillusionment with traditional parties, and that disillusionment has been leading to these parties’ shock defeat in elections across the world.

The European Union’s foreign policy chief has issued a hugely provocative statement, urging the bloc to “develop an appetite for power” to better chart its own independent course and navigate various crises especially with Trump in the White House.

“European Union governments need to be willing to intervene in international crises or risk prolonging paralysis in their foreign policy, the EU’s top diplomat said on Sunday,” Reuters reports. The EU’s foreign policy chief Joseph Borrell made the statements at the Munich Security Conference, while underscoring he doesn’t only mean military power. 

The comments appeared tailored to the Trump era and the potential for another four years of him in the White House, which has witnessed the US administration tear up the Europe-backed Iran nuclear deal (JCPOA), impose record tariffs on European goods, take drastic unilateral action on the question Israel-Palestine peace, pull out of the Paris climate accord, and ‘meddle’ in Europe’s energy affairs. 

“Europe has to develop an appetite for power,” Borrell stressed. “We should be able to act… not everyday making comments, expressing concern,” he told leaders, lawmakers and diplomats gathered for the annual forum on international security policy.

Borrell called for the bloc to speak powerfully with one voice, as opposed failing time and again on building consensus, in order to boost its “soft power” in the face of Trump’s “America First” policies. “When there is no unanimity (in the EU), the remaining majority have to act,” Borrell said. Borrell is former European parliament president and recently served as Spain’s foreign minister.

One immediate pressing EU foreign policy question which the continent has remain paralyzed on is coordinating to implement and monitor an arms embargo on Libya. Despite new recent commitments of EU members to uphold a United Nation arms ban, it’s lately been described as “a joke” due to Europe’s practical inability to implement it in the Mediterranean. 

“The arms embargo has become a joke, we all really need to step up here,” UN Deputy Special Representative to Libya Stephanie Williams said this weekend in Munich. “It’s complicated because there are violations by land, sea and air, but it needs to be monitored and there needs to be accountability,” Williams added.

The EU has watched with increased alarm as the crises in both Idlib and Libya heats up, leaving the potential for a repeat of the migrant and refugee crisis of 2015 and 2016, when hundreds of thousands flooded Europe’s shores in record numbers.