Tag: finance

Authored by Lance Roberts via RealInvestmentAdvice.com,

Over the last few weeks, we have discussed the outsize market advance driven by the Fed’s massive liquidity injections into the market. As we discussed with our RIAPRO subscribers (30-day RISK FREE Trial) we stated:

“If it appears to you that the recent rally is an anomaly, your thoughts do not deceive you. The graph below shows that recent returns divided by annualized volatility (risk) have been running higher than at any time since the financial crisis.

This standard calculation of return per unit of risk is technically called the Sharpe Ratio. The ratio has been sitting around 2.0 for most of January. To put that into context, the current reading is about 4 sigma (standard deviations) from the norm, an event that should statistically occur in one day out of every 43 years. Since January first, there have been 5 daily readings that were greater than 4 sigmas!”

Not surprisingly, due to that extreme reading the correction on Monday was the largest we have seen since the Federal Reserve started intervening into the financial market in mid-October of last year.

This analysis, along with several other posts over the last couple of weeks, detailed our concerns about inherent market risk and why we reduced portfolio exposure a couple of weeks ago. To wit:

“On Friday, we began the orderly process of reducing exposure in our portfolios to take in profits, reduce portfolio risk, and raise cash levels. 

• In the Equity Portfolios, we reduced our weightings in some of our more extended holdings such as Apple (AAPL,) Microsoft (MSFT), United Healthcare (UNH), Johnson & Johnson (JNJ), and Micron (MU.)

• In the ETF Sector Rotation Portfolio, we reduced our overweight positions in Technology (XLK), Healthcare (XLV), Mortgage Real Estate (REM), Communications (XLC), Discretionary (XLY) back to portfolio weightings for now. 

• The Dynamic Portfolio was allocated to a market neutral position by shorting the S&P index itself.

Let me state clearly, we did not ‘sell everything’ and go to cash. We simply reduced our holdings to raise cash, and capture some of the gains we made in 2019. When the market corrects we will use our cash holdings to either add back to our current positions, or add new ones.”

While I received a lot of emails and comments questioning why would we “sell out of the market” and “go to cash,” such was NOT the case. We did raise our cash position from 5% to 12%. Just prior to increasing cash, we had previously added defensive exposure in fixed income, gold, gold miners, and REIT’s. However, we still maintain the majority of our long equity exposures currently.

You Can’t Time Market Corrections

At the time we made these changes, it appeared we were clearly wrong as the market continued to grind higher. As Howard Marks once quipped:

“Being early, even if you are right, is the same as being wrong.” 

However, from a portfolio management, and more particularly, a “risk mitigation” view, our job isn’t necessarily to hit the exact tops or bottoms, just to provide a cushion against losses.

During the last couple of weeks, we have noted the extreme overbought, overly bullish, and over complacent conditions of the market. Here is an updated chart of the S&P 500 from two weeks ago when we discussed taking profits.

With the markets pushing into 3-standard deviations above the 200-day moving average, it was only a function of time before a correction occurred. Therefore, while we were early taking profits, the end result is it reduced portfolio risk against a pending correction. As I wrote then:

“While the markets could certainly see a push higher in the short-term from the Fed’s ongoing liquidity injections, the gains for 2020 could very well be front-loaded for investors. 

Taking profits and reducing risks now may lead to a short-term underperformance in portfolios, but you will likely appreciate the reduced volatility if, and when, the current optimism fades.”

When discussing portfolio management, it is often suggested that you can’t “time the market.”

That statement is correct.

You can not effectively, and repetitively, get “in” and “out” of the market on a timely fashion. I have never suggested that an investor should try and do this. However, I have discussed managing risk by adjusting market exposure at times when “risk” outweighs the potential for further “reward.”

While our actions are almost always misunderstood, and labeled as “bearish,” I am actually neither bullish or bearish. In our practice, we follow a very simple set of rules, which forms the core of our portfolio management philosophy which focuses on capital preservation and long-term “risk-adjusted” returns.

As long-term investors, we don’t worry about short-term rallies, we only need to worry about the direction of overall market trends, and focus on capturing more of the positive and less of the negative. This philosophy stems from Baron Nathan Rothschild’s view:

“You can have the top 20% and the bottom 20%, I will take the 80% in the middle.”

While our assessment of the market two-weeks ago was that risk versus reward was unbalanced, such can remain the case for extended periods of time.

The problem with an economy being propped up by artificially appreciated assets is that this pendulum swings both ways. At some point, prices eventually decline. No one knows what will cause the decline;

• Higher interest rates like in 2018,

• A presidential tweet, when he launched the “trade war” with China.

• The ongoing implosion of the Chinese economy is still a threat.

• It could just be the realization by the markets that asset prices don’t grow to the sky.

• Or, it could be triggered by an unexpected, exogenous event, which results in the markets “repricing” risk. 

The “coronavirus” was the exogenous event the markets had not priced into its view.

Is It Time To “Buy The Dip?”

With the “sell off” on Monday, the immediate reaction by investors is to jump in and “buy the dip.” This would seem to be the logical action given the Federal Reserve is still supplying liquidity to the market currently.

Maybe not.

The chart below is part of the analysis we use to “onboard” new client portfolios. The purpose of this measure is to avoid transitioning a new client into our portfolio models near a short-term peak of the market. The vertical red lines suggest we avoid adding equity risk to portfolios and vice versa.

There are a few important points to denote in the chart above.

1. The top and bottom signals are essentially relative strength and momentum measures. Both are currently still on “buy” signals and the current “sell off” has not reversed those signals as of yet. 

2. With the market still very deviated above the longer-term 200-dma, and just clearing out of 3-standard deviation territory, there is currently more downside risk, than upside reward. 

3. Note that corrections, once the “sell signals” are triggered can last from several weeks, to several months. During the correction process there are often multiple opportunities to reduce risk and raise cash accordingly. 

4. The last two times the market pushed into 3-standard deviation territory, the resulting corrections were fairly sharp and lasted for several months.

However, on a VERY short-term basis the market is indeed oversold, and is testing the breakout of the upward trending trading range from last year. Given the MACD has registered a “sell signal” from a fairly high level, investors must consider the risk of further downside even if the market rallies over the next couple of days.

Don’t be fooled that a short-term reflexive rally is an “all-clear” for the bull market to resume. With the bulk of our momentum, relative strength, and overbought/sold indicators just starting to correct from recent highs, it is likely short-term rallies will be “selling opportunities” over the next couple of weeks as the market either corrects further or consolidates recent gains.

As we have detailed over the last few missives, due to the rather extreme extension of the market, this is likely the beginning of a correction which could encompass a 5-10% decline in totality before it is complete.

The problem for investors is they tend to make to critical mistakes in managing portfolios.

• Investors are slow to react to new information (they anchor), which initially leads to under-reaction but eventually shifts to over-reaction during late-cycle stages.

• Investors are ultimately driven by the “herding” effect. A rising market leads to “justifications” to explain over-valued holdings. In other words, buying begets more buying.

• Lastly, as the markets turn, the “disposition” effect takes hold and winners are sold to protect gains, but losers are held in the hopes of better prices later. 

With the Federal Reserve reducing slowing its torrid pace of liquidity, still weak economic growth, and potential for weaker than expected earnings growth, the risk remains to the downside currently.

From that perspective, we are continuing to maintain our higher levels of cash, and we will use reflexive rallies in the short-term to rebalance portfolio risk as needed according to our investment discipline.

1. Tighten up stop-loss levels to current support levels for each position.

2. Hedge portfolios against major market declines.

3. Take profits in positions that have been big winners

4. Sell laggards and losers

5. Raise cash and rebalance portfolios to target weightings.

Notice, nothing in there says, “sell everything and go to cash.”

As Michael Lebowitz previously noted:

“The point being made here is essential; risk management is generous. Based on the past 100 years of market data, there is no evidence that long-term returns are penalized by taking a defensive investment posture at high valuations. Investors today do not need to ‘buy and hold’ stocks and remain heavily invested when expected returns are paltry. The historical record, though imprecise, affords an excellent map for navigating and managing risk.”

By having reduced risk, we can afford to remain patient and wait for the next opportunity. Much like a professional baseball player, by reducing risk we create an environment that is “emotionally” controllable and we can exercise patience until a “fat pitch” comes along.

One thing is for certain, swinging at every pitch, won’t get you into the “hall of fame.” 

Copper prices are down 10 straight days – the longest streak of losses for the commodity with an economics PhD since 1986!

And as stocks rebound – for no reason whatsoever – copper continues to fall…

Source: Bloomberg

This is the worst 9-day drop since early 2015’s global growth scare…

Source: Bloomberg

And, it appears that other lifeblood of the global economy is also not buying what stocks are selling…

Source: Bloomberg

And bonds continue to disagree with stocks’ exuberance…

Source: Bloomberg

Still – if Powell promises to save the world by printing more money – potentially to use as homemade masks – then why not keep buying stocks? What could go wrong?

Two more Bernie Sanders staffers have been caught on tape speaking passionately about ‘the revolution’ they’re fighting, they type of people the Sanders campaign attracts, and the need to take direct, violent action against their enemies.

“I’ve Canvassed with Someone Who’s an Anarchist, and with Someone Who’s a Marxist/Leninist. So, We Attract Radical, Truly Radical People in the Campaign…Obviously That’s Not Outward Facing,” said South Carolina field organizer, Mason Baird, who told a Project Veritas undercover operative “We would need a federal government and a labor movement that is working together to strip power away from capitalists and preferably directing that violence towards property.”

BREAKING: @BernieSanders Field Organizer Mason Baird ‘We attract truly radical people to the campaign…That’s obviously not like, outward facing…”#Expose2020 pic.twitter.com/XsNFD9QPO4

— James O’Keefe (@JamesOKeefeIII) January 28, 2020

“A lot of those people (on the campaign) who do that kind of work, they’re Marxist-Leninists, they’re anarchists…They have more of a mind for direct action…engaging in politics outside of the electoral system,” says Baird.

BREAKING: @BernieSanders Field Organizer Mason Baird “A lot of those people(on the campaign) who do that kind of work…they’re Marxist-Leninists, they’re Anarchists…They have more of a mind for direct action…engaging in politics outside of the electoral system”#Expose2020 pic.twitter.com/pF31MBsTsm

— James O’Keefe (@JamesOKeefeIII) January 28, 2020

Another South Carolina field organizer, Daniel Taylor, said that not everybody is ready for the “crazy stuff,” when it comes to direct action.

“We don’t want to scare people off, so you kinda have to feel it out before you get into the crazy stuff…more, more extreme organizations and stuff like Antifa, you know you were talking about the Yellow Vests and all that; but, you know we’re kinda keeping that, keeping that on the back-burner for right now.“

“It’s unfortunate that we have to make plans for extreme action, but like I said, they’re not going to give it to us, even if Bernie is elected.“

BREAKING: “I have no problem going all in on the campaign stuff because you’re planting a seed…The whole socialist thing four years ago was a lot more toxic than it is today…” – @BernieSanders Field Organizer Daniel Taylor #Expose2020 pic.twitter.com/kWcqXOaYuy

— James O’Keefe (@JamesOKeefeIII) January 28, 2020

Earlier this month, Veritas caught two other Sanders staffers extolling the virtues of throwing capitalists in literal gulags, and fighting in the revolution.

In short, Sanders is getting the Antifa vote, assuming they vote.

As O’Keefe notes at the end of the latest montage, will Bernie disavow these radicals within his campaign, or does he welcome them?

Watch the full video below:

Blain’s Morning Porridge, submitted by Bill Blain

“We are a plague on the Earth.”

Coronavirus isn’t the issue. It’s an unexpected event – a No-see-Um that caught the market by surprise. It’s its effect that matters. It’s refocusing markets on to the things they do know.  It’s bound to have some rebalancing effects on stocks directly impacted, and on policy. The reaction in terms of the dip and increased VIX vol is what we expected on unknowable news.

Strip it out, and the critical factor for general prices remains the absolute disconnect between high stock prices relative to corporate earnings (lacklustre), oil prices (tumbling), commodity prices (low) and growth (anaemic). The IMF may have raised its global GDP expectations to “still breathing”, but its only central banks remaining accommodative, and the market relying on them to keep juicing the party – that’s been keeping this market where it is. 

How much longer will the Central Banks play along?  They will be watching the virus for signs of “economic drag”. But, soon to be ex-BOE Governor Mark Carney could throw a completely unnecessary ease in the UK as a final Remainer pout. The market reckons the US Fed will remain on hold till Q3, if not longer. 

Even the ECB may be waking up to the reality – a Luxemblurg member noting with typical clarity how Europe’s Central Bank might just have contributed to “very elevated” asset prices. Oops.  “These unusual times call for heightened vigilance regarding the financial-stability consequences of our monetary policy actions.” Congratulations the Yves Mersch who gets a gold star for stating the downright blinking obvious.  Heaven help us if the ECB’s promised policy review actually acknowledges just how they’ve progressed the Japanification of Europe through zero rates, austerity, QE and pig-headedness (particularly in acknowledging the weakness of European banking and achieving little to alleviate it).  But the ECB is a story for another day – and after Friday’s divorce is finalised I don’t suppose we Brits will ever hear from Yoorp again….

If even the ECB knows the current market levels are built on a sand of loose policy and inflated financial asset prices.. who doesn’t? 

Going back to the Coronavirus – it’s having real damaging effects on the regional and global economy. The immediate losers include the airlines, luxury good makers and miners. But it’s interesting how Tech stocks have also wobbled. The government mandated policy responses have triggered real and significant effect.  If they set the world a wondering about how the specific virus damage to stocks has morphed into a knee-jerk falls in indexes – does it mean it’s time to take cover, or look for buying opportunities. 

If it’s so clear stocks are overvalued, then could this be the sell-off moment? Is it time to dump stocks? Don’t be silly! 

Its time to get selective – keep the diamonds, and dump the dross while the market remains this frothy and overpriced.

Why would you sell high dividend stocks to buy bonds at record low yields? Makes much more sense to sell the speculative stuff at current valuations where they aren’t paying returns. (That will trigger a host of comments from the Rude-American’s about how I don’t understand its all about stock prices, not profits!) Although there may still be some upside in bond prices from a further round of global easing if we get renewed weakness – that certainly isn’t nailed on, and it will be limited.  

What is far more likely to happen is a refocus on what stocks to own and at what price. Do the Tech giants justify their high valuations?  The cornerstone of my own PA portfolio has been Apple and the news sounding increased orders all sounds positive. But do the successful companies like Facebook, Amazon, Google etc justify the high multiples? Why not? Do the questionable multi-unicorns still in expansion mode justify expectations – do the competitive threats to Uber and Netflix justify lower prices. And what about Tesla’s extraordinary valuation?  Keep the former, I have doubts on the latter.

This is not a run for the hills moment, nor is it a buy the dip opportunity. But it might be time to make some rational choices on what to keep and spring clean portfolios of over-optimistic crud. 

Boeing

Interesting to see Boeing easily raise a $12 bln 2-year L+100 bank loan to cover the grounding delays in B-737 Max deliveries. Its described in the press as a vote of confidence in the plane-maker. A few weeks ago I almost made a speculative call to buy Boeing, expecting a sudden uptick on the stock on rumours the MAX might get approved for flight. Now Boeing say it will be H2, although the FAA say it might be sooner if Boeing continue to hit milestones. 

Now I am beginning to think the bank loan looks… “Courageous”. The odds continue to stack up against Boeing. New orders for the B-787 Dreamliners have dried up and production has been slowed. The new B-777x finally flew last weekend, but is generally considered to the wrong plane, at the wrong time and appeals pretty much exclusively to lead order Emirates. Pilots and passengers are united against the B-737 Max – even if does get back into service it’s going to be interesting to see if orders are cancelled. 

All of which leaves nothing on the Boeing production line any airline particularly wants. There is nothing in the development shed like a new super-efficient smaller regional work horse. Instead of a promising new product, Boeing executives can proudly point to the fact they squandered all the 737 revenues on a stock buyback programme that made executives richer through their stock options, and happy shareholders till the B-737 Max started crashing. The stock has performed dismally since.  It could get far worse if the expected 737 Max cancellations kick in and its recertification is further delayed. It will get much worse when investors wake up and smell the coffee… and discover where the company value went.

Lesson – stock buybacks don’t create value. Product does. 

As the real economy continues to decelerate and the Federal Reserve’s ‘Not QE’ catapulted growth stocks to the moon, well not anymore since coronavirus has spooked global markets, bankers across the industry have seen their annual bonuses stagnate.  

JPMorgan Chase & Co. recently decided to keep annual bonuses flat across its investment bank segment for the 2019 year, reported Bloomberg. 

JPM bankers should not complain about the lack of pay increases, at least they still have a job, considering an industrywide cut has shocked many in the last year, as macroeconomic headwinds continue to rise. 

The bank noted compensation expense grew 4% to $10.6 billion for the corporate and investment bank units last year as headcount rose 3%.

Bloomberg said pay for top management increased by 1.6% to 2.4% last year, a small boost compared to 2018 figures. 

Even CEO Jamie Dimon’s compensation only increased by a mere 1.6% to $31.5 million, a reduction in growth seen over the prior year.

Despite employment compensation growth waning, JPM recorded some of the highest profits ever with $36.4 billion, due to a 56% increase in stock and bond trading in the fourth quarter, after it single-handedly triggered the repo crisis, forcing the Fed to launch ‘Not QE.’

Across the industry, we’ve noted as the stock market hit record highs, thousands of bankers have been laid off. 

Morgan Stanley last month fired 2% of its workforce, or approximately 1,500 workers, due to a slowdown in the economy. 

Earlier this month, Barclays Plc slashed 100 senior staff at its investment bank unit. These cuts were primarily made in Europe and the U.S. 

Goldman Sachs has had its fair share of layoffs and pay reduction in 2019. Now bankers at the firm, who have recently visited China, have been told to quarantine themselves at home for two weeks for fears they might have coronavirus.

It seems coronavirus could be the next excuse by banks to reduce pay or layoff staff members.

This morning’s modest rebound in stocks has many proclaiming the worst is over and everything is awesome once again, on the premise that The Fed will soothe all fears with their magical money-printing sentiment savior…

Bloomberg’s Richard Breslow suggests, correctly, that a little more caution is warranted given the off-side positioning, extreme valuation, and unknown unknowns involved – no matter what The Fed promises.

By all accounts the volumes being traded are running at strong levels. Some of that has to do with the Chinese markets being closed and proxy outlets have to be found elsewhere. Obviously portfolios have to be managed. And from the look of things, what appeared to be safely out-of-the-money options that were sold to pick up some “easy” money, in lieu of being able to earn a reasonable level of interest, don’t look quite as benign as before and need to be dealt with. That’s certainly been a driver of the overnight Treasury trade. There are all sorts of reasons to fully justify being active, including the old-fashioned one of trying to make a living.

But, interestingly enough, unlike when the trade headlines where popping up or Christmas was rapidly approaching, there doesn’t seem to be the usual chorus from advice-givers to lay low or avoid being involved altogether. Yet, this should be a much more difficult set of events to navigate than ones we’ve had a lot of practice with. And, unlike the others, we don’t always know what a given development even means. Of course, until investors get back on-side with their positions, we won’t really know what the next stage will look like.

Let’s stipulate that very few of us really have a clear understanding how this will play out and whether there will be lasting ramifications. Turning this into an exercise of equity sector rotation isn’t nearly as straightforward as it seems and may need to be unwound just as fast as it was implemented. But it’s what we do. Just keep in mind that every market gyration doesn’t imply that the trader or algorithm has a useful new insight.

The time of year is probably a factor. It’s harder to justify shutting up shop in January than December. And, it may not seem like it, as traders are spending a lot of time discussing what is a safe haven or not and risk-off was certainly the order of the day on Monday, but greed remains as much on people’s minds as fear. As ugly as is the news on the ground, investors are of the mindset to be looking for the renewed rally they are still sure will be coming.

The expectation that, if need be, the central banks will jump into the fray, is just too ingrained in our own reaction functions to be ignored. And that clearly affects investor behavior. Futures are moving toward greater and sooner potential cuts. Frankly, it strikes me as a dangerous game. At the risk of being accused as sacrilegious, not all problems can be solved by expediting some additional liquidity.

Negative rates won’t cause quarantined people to run out and spend. No matter what the theory says. But they very well might decide that increased saving is prudent.

Is this the dip for buying (like in 2000)?

There is little question, nor should there be, that the virus outbreak is the lead story driving markets and the news. But it’s worth keeping in mind that it isn’t the only one. Just make sure you don’t attribute absolutely everything that happens to some new development that you can’t find.

After a mixed December (headline flat, current up, future down), analysts expected the ongoing ramp in stocks to have lifted the Conference Board consumer confidence survey in January.

Both present situation and futures expectations jumped, lifting the headline to its highest since August.

• Consumer confidence in January rose to 131.6 vs 128.2 in prior month.

• Present situation confidence rose to 175.3 vs 170.5 last month

• Consumer confidence expectations rose to 102.5 vs 100.0 last month

Source: Bloomberg

The present situation reading is back at the highest level since the dotcom bubble peak…

Source: Bloomberg

The Labor Differential (Jobs Plentiful – Hard to Get) surged back near record highs…

Source: Bloomberg

Presumably this survey was undertaken before the latest downturn in stocks amid global pandemic concerns.

Finally, we wonder if – as we have seen in the past – if the spread between dis-saving and consumer confidence has once again been stretched too wide…

Source: Bloomberg

Still, as long The Fed promises to keep stock prices high, everything in the ‘economy’ must be awesome, right?

Authored by Steve Watson via Summit News,

Don Lemon howls with laughter as panel imitate southern accents

This is CNN. During a discussion regarding the impeachment show trial, Don Lemon and a pair of talking heads devolved into imitating southern accents and declaring that anyone who can read or spell is an elitist, in an effort to mock Trump voters as stupid rednecks.

In an unbridled show of arrogance, Lemon cackled while blowhard Rick Wilson and New York Times op-ed writer Wajahat Ali suggested that anyone who voted for Trump is an illiterate dummy.

Wilson declared that “Donald Trump couldn’t find Ukraine on a map if you had the letter ‘U’ and a picture of an actual, physical crane next to it,” then asserted that Trump is backed only by a “credulous boomer rube demo” of Americans.

“Donald Trump’s the smart one, and there all y’all, y’all elitists are duuuumb.” Wilson shouted in a faux Southern accent.

The arrogance, the dismissiveness, the smug cackling, the accents.

If Donald Trump wins re-election this year, I’ll remember this brief CNN segment late one Saturday night in January as the perfect encapsulation for why it happened. pic.twitter.com/8kQ6zN9AZV

— Steve Krakauer (@SteveKrak) January 28, 2020

“You elitists, with your geography and your maps and your spellin’.”  Ali joined in, with his own redneck impression.

“Your math and your readin!’” Wilson added, the hilarity in full flow.

“Yeah, your readin’, your geography, knowing other countries, sipping your latte,” said Ali.

“All those liiines on the map,” said Wilson.

“Only them elitists know where Ukraine is,” Ali added.

When Lemon finally composed himself,  he admitted “I needed that.”

This display is a prime example of why Trump will win a second term.

Sitting in a television studio on the East cost, calling Americans stupid and illiterate doesn’t tend to go over too well.

The ultimate irony is that Y’all elitists really are duuuumb.

This isn’t disdain or disagreement. What Wajahat, Don, & Rick showed was a disrespect, hatred, & mockery for their fellow man who disagree. I don’t want to hear @JakeTapper, @andersoncooper, @BrianStelter, @ChrisCuomo, or anyone on @CNN lecture about their higher level of decency https://t.co/h47wnkcUCF

— Curtis Houck (@CurtisHouck) January 28, 2020

America, this is what CNN thinks of you…
pic.twitter.com/puuVjRLlw1

— Daily Caller (@DailyCaller) January 28, 2020

Bitcoin has extended its gains overnight, soaring back above $9,000…

Source: Bloomberg

Breaking back above its 200DMA…

Source: Bloomberg

The rest of the crypto space is also accelerating higher…

Source: Bloomberg

Many have noted the recent resurgence is in line with the bid for bonds and gold as safe-haven assets since the Coronavirus spreads, but that is being downplayed broadly by the crypto community.

As CoinTelegraph’s William Suberg reports, a report by the Financial Times with the headline “Coronavirus is good for Bitcoin” came in for particular criticism. Notably, the report cited two random Twitter accounts dedicated to altcoin XRP as sources.

image courtesy of CoinTelegraph

As Cointelegraph reported, Bitcoin has long exhibited increasingly strong technical fundamentals, which preceded recent price moves. 

Vays: virus would “hurt” BTC in epidemic scenario

Discussing the impact of coronavirus, trader Tone Vays nonetheless stopped short of agreeing with the idea that the disease could perpetually fuel further gains. 

If it were to spread internationally, for example, panicked investors would likely reduce speculative activity, meaning less interest in non-traditional assets such as Bitcoin. 

On the latest episode of his Trading Bitcoin YouTube series, Vays told viewers:

“The coronavirus does bring some economic fear, so the fear that the coronavirus could start to spread is certainly helping the rise of Bitcoin versus hurting the rise of Bitcoin.”

Vays also noted that Bitcoin would need to stay above $9,000 for several days to cement its recent bullish gains.

Following comments from the WHO chief that the coronavirus is only a China problem, not a global problem – which seems false given the apparent first non-Chinese death this morning in Thailand (and is perhaps only designed to maintain elevated risk asset prices around the world) – the Centers for Disease Control and Prevention (CDC) has raised its travel warning to level 3 for China – Avoid all non-essential travel.

• CDC recommends that travelers avoid all nonessential travel to China. In response to an outbreak of respiratory illness, Chinese officials have closed transport within and out of Wuhan and other cities in Hubei province, including buses, subways, trains, and the international airport.  Additional restrictions and cancellations of events may occur.

• There is limited access to adequate medical care in affected areas.

A novel (new) coronavirus is causing an outbreak of respiratory illness that began in the city of Wuhan, Hubei Province, China. This outbreak began in early December 2019 and continues to grow. Initially, some patients were linked to the Wuhan South China Seafood City (also called the South China Seafood Wholesale Market and the Hua Nan Seafood Market).  

Chinese health officials have reported thousands of cases in China and severe illness has been reported, including deaths. Cases have also been identified in travelers to other countries, including the United States. Person-to-person spread is occurring in China. The extent of person-to-person spread outside of China is unclear at this time.

Coronaviruses are a large family of viruses. There are several known coronaviruses that infect people and usually only cause mild respiratory disease, such as the common cold. However, at least two previously identified coronaviruses have caused severe disease — severe acute respiratory syndrome (SARS) coronavirus and Middle East respiratory syndrome (MERS) coronavirus. 

Signs and symptoms of this illness include fever, cough, and difficulty breathing. This novel coronavirus has the potential to cause severe disease and death. Available information suggests that older adults and people with underlying health conditions or compromised immune systems may be at increased risk of severe disease.

In response to this outbreak, Chinese officials are screening travelers leaving some cities in China. Several countries and territories throughout the world are reported to have implemented health screening of travelers arriving from China.

On arrival to the United States, travelers from China may be asked questions to determine if they need to undergo health screening. Travelers with signs and symptoms of illness (fever, cough, or difficulty breathing) will have an additional health assessment.

What can travelers do to protect themselves and others?

CDC recommends avoiding nonessential travel to China. If you must travel:

• Avoid contact with sick people.

• Discuss travel to China with your healthcare provider. Older adults and travelers with underlying health issues may be at risk for more severe disease.

• Avoid animals (alive or dead), animal markets, and products that come from animals (such as uncooked meat).

• Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

If you were in China in the last 14 days and feel sick with fever, cough, or difficulty breathing, you should:

• Seek medical care right away. Before you go to a doctor’s office or emergency room, call ahead and tell them about your recent travel and your symptoms. 

• Avoid contact with others.

• Not travel while sick.

• Cover your mouth and nose with a tissue or your sleeve (not your hands) when coughing or sneezing.

• Wash hands often with soap and water for at least 20 seconds. Use an alcohol-based hand sanitizer if soap and water are not available.

*  *  *

Does any of that sound like this is “contained”… or just a China problem?