Month: March 2020

Authored by Michael Snyder via The End of The American Dream blog,

All across America, store shelves are emptying and people are becoming increasingly frustrated because they can’t get their hands on needed supplies. 

Most Americans are blaming “hoarders” for the current mess, but it is actually much more complicated than that.  Normally, Americans get a lot of their food from restaurants.  In fact, during normal times 36 percent of all Americans eat at a fast food restaurant on any given day.  But now that approximately 75 percent of the U.S. is under some sort of a “shelter-in-place” order and most of our restaurants have shut down, things have completely changed.  Suddenly our grocery stores are being flooded with unexpected traffic, and many people are buying far more than usual in anticipation of a long pandemic.  Unfortunately, our food distribution systems were not designed to handle this sort of a surge, and things are really starting to get crazy out there.

I would like to share with you an excerpt from an email that I was sent recently.  It describes the chaos that grocery stores in Utah and Idaho have been experiencing…

When this virus became a problem that we as a nation could see as an imminent threat, Utah, because of its culture of food storage and preparing for disaster events seemed to “get the memo” first. The week of March 8th grocery sales more than doubled in Utah, up 218%. Many states stayed the same with increases in some. Idaho seemed to “get the memo” about four days later. We were out of water and TP four days after Utah. Then we were out of food staples about four days later. Next was produce following a pattern set by Utah four days earlier.

The problem for us in Idaho was this. The stores in Utah were emptied out then refilled twice by the warehouses before it hit Idaho. Many of these Utah stores have trucks delivering daily. So when it did hit Idaho the warehouses had been severely taxed. We had a hard time filling our store back up even one time. We missed three scheduled trucks that week alone. Then orders finally came they were first 50% of the order and have dropped to 20%. In normal circumstances we receive 98% of our orders and no canceled trucks. Now three weeks later, the warehouses in the Western United States have all been taxed. In turn, those warehouses have been taxing the food manufacturers. These food companies have emptied their facilities to fill the warehouses of the Western United States. The East Coast hasn’t seemed to “get the memo” yet. When they do what food will be left to fill their warehouses and grocery stores?

Food distribution and resources for the Eastern United States will be at great peril even if no hoarding there takes place. But of course it will.

Additionally the food culture of the East Coast and other urban areas is such that people keep very little food on hand. They often shop several times weekly for items if they cook at home. They don’t have big freezers full of meat, home canned vegetables in their storage rooms, gardens, or beans, wheat, and rice in buckets in the their basements.

With most of the country locked down, normal economic activity has come to a standstill, and it is going to become increasingly difficult for our warehouses to meet the demand that grocery stores are putting on them.

Meanwhile, our farmers are facing severe problems of their own.  The following comes from CNBC…

The U.S.-China trade war sent scores of farmers out of business. Record flooding inundated farmland and destroyed harvests. And a blistering heat wave stunted crop growth in the Midwest.

Now, the coronavirus pandemic has dealt another blow to a vulnerable farm economy, sending crop and livestock prices tumbling and raising concerns about sudden labor shortages.

The chaos in the financial markets is likely to continue for the foreseeable future, and it is going to remain difficult for farm laborers to move around as long as “shelter-in-place” orders remain in effect on the state level.

Iowa farmer Robb Ewoldt told reporter Emma Newburger that “we’ve stopped saying it can’t get worse”, and he says that this coronavirus pandemic looks like it could be “the straw that broke the camel’s back”…

“We were already under extreme financial pressure. With the virus sending the prices down — it’s getting to be the straw that broke the camel’s back,” said Iowa farmer Robb Ewoldt.

“We were hoping for something good this year, but this virus has stopped all our markets,” he said.

Of course this comes at a time when millions of Americans are losing their jobs and unemployment is shooting up to unthinkable levels.  Without any money coming in, many people are already turning to alternative sources of help in order to feed themselves and their families.

On Monday, hundreds of cars were lined up to get food from a food bank in Duquesne, Pennsylvania.  To many, this was eerily reminiscent of the “bread lines” during the Great Depression of the 1930s.

Hundreds of cars wait to receive food from the Greater Community Food Bank in Duquesne. Collection begins at noon. @PghFoodBank @PittsburghPG pic.twitter.com/94YFaO7dqX

— Andrew Rush (@andrewrush) March 30, 2020

And it is also being reported that the number of people coming for free meals on Skid Row in Los Angeles has tripled since that city was locked down.

Sadly, these examples are likely only the tip of the iceberg of what we will see in the months ahead.

And it won’t just be the U.S. that is hurting.  The following comes from a Guardian article entitled “Coronavirus measures could cause global food shortage, UN warns”…

Kazakhstan, for instance, according to a report from Bloomberg, has banned exports of wheat flour, of which it is one of the world’s biggest sources, as well as restrictions on buckwheat and vegetables including onions, carrots and potatoes. Vietnam, the world’s third biggest rice exporter, has temporarily suspended rice export contracts. Russia, the world’s biggest wheat exporter, may also threaten to restrict exports, as it has done before, and the position of the US is in doubt given Donald Trump’s eagerness for a trade war in other commodities.

If this pandemic stretches on for an extended period of time, food supplies are inevitably going to get even tighter.

So what can you do?

Well, perhaps you can start a garden this year if you don’t normally grow one.  Apparently this pandemic has sparked a tremendous amount of interest in gardening programs around the country…

Because of the coronavirus pandemic, more people are showing an interest in starting home gardens. Oregon State University‘s (OSU) Master Gardener program took notice of the growing interest.

To help citizens who want to grow their own food, the university kindly made their online vegetable gardening course free until the end of April. OSU’s post on Facebook has been shared over 21,000 times.

Food is only going to get more expensive from here on out, and growing your own food is a way to become more independent of the system.

But if you don’t have any seeds right now, you may want to hurry, because consumer demand is spiking…

“It’s the largest volume of orders we have seen,” said Jere Gettle of Baker Creek Heirloom Seeds in Mansfield, Missouri. Peak seed-buying season for home gardeners is January to March, but the normal end-of-season decline in orders isn’t happening.

Customers are gravitating to vegetables high in nutrients, such as kale, spinach and other quick-to-grow leafy greens. “Spinach is off the charts,” said Jo-Anne van den Berg-Ohms of Kitchen Garden Seeds in Bantam, Connecticut.

For years, I have been warning people to get prepared for “the perfect storm” that was coming, but of course most people didn’t listen.

But now it is upon us.

Desperate people have been running out to the grocery stores to stock up on toilet paper only to find that they are limited to one or two packages if it is even available.

And now that “panic buying” of seeds has begun, it is probably only a matter of time before many stores start running out.

We have reached a major turning point in our history, and things are only going to get crazier.

Unfortunately, the vast majority of Americans still have absolutely no idea what is ahead of us…

Colleges and universities across the nation are stuck in financial limbo at a moment that key staffing, faculty contracts, student recruiting, and donor revenue-related decisions are typically made for next year, also as controversy erupts over refusal to refund student housing and campus activity fees. The $600 billion-plus higher education industry is expected to suffer effects of this Spring’s campus shutdowns at least through next Fall, given everything down to campus tours for potential recruits have been canceled, leaving open the crucial question of incoming levels of freshmen and tuition revenue for next year.

A case in point is as follows: “The financial meltdown prompted by the novel coronavirus puts record-high endowment values in jeopardy, along with the ability for donors to give. Princeton University canceled its reunion, which draws 25,000 to the Ivy League school,” according to Bloomberg.

It’s likely that a number of academic institutions will delay sending out contracts, usually done in April, for the following year — and some like Baylor University in Texas are already informing teachers and staff their contracts will reflect a freeze on raises through next year, meaning even the 2-3% annual raise to account for inflation will be cut.

But the state of limbo amid the national coronavirus economic “pause” has much deeper reverberations that could threaten the very survival of some higher ed institutions: “Students and professors at universities aren’t the only ones wondering when schools will re-open. Bondholders and stockholders also have a vested interest in getting them back on campus,” Bloomberg reports this week.

Most schools have gone to a purely online and remote learning format for the rest of the semester; however, this has hit student housing managers and investors hard, also as questions linger over whether or not students can terminate their leases. Bloomberg writes further:

S&P Global Ratings cut its outlook for the private student housing sector to negative on Wednesday, citing expected challenges from the sudden and potentially prolonged decline in student housing occupancy and associated loss of rental revenue.

Wealthier schools such as Harvard, Brown and Princeton are expected to weather the storm with greater ease, with some already offering students housing credit and prorated refunds conditioned in their return to campus. 

However, not every institution is able to promise such relief, also given much student housing is operated by outside companies and firms:

Student housing projects that are lower-rated or have “cash cushions” of less than 90 days are most at risk, Kazatsky said. Of 252 student-housing projects, 144 have cash-on-hand levels of less than a year and 32 have less than 90 days of cash available, he added. About 67% of those student-housing projects are backed by an entity not related to the university while the rest are supported by the colleges.

Some schools are evoking backlash by refusing any level of dorm or campus activity fee related refunds altogether.

UNR gets parent, student pushback after mandating dorm move out without partial refunds https://t.co/f5ca9rTT13

— RGJ.com (@rgj) March 20, 2020

Needless to say this is completely uncharted territory for institutions which of necessity make all their major funding, staffing, and financial decisions some six months before the Fall opening and start of the semester. 

“Refunding or crediting rents would have an adverse impact on (university student housing) cash flow, and savings from reduced operating expenses would not be sufficient to make up for the revenue reduction,” the Chester County Industrial Development Agency said in a recent notice to bondholders, citing woes at West Chester University outside Philadelphia.

Meanwhile, the historic $2 trillion stimulus package signed into law by Trump Friday afternoon promises about $14 billion to colleges and universities for pandemic response relief. 

However, this will likely be felt by most campuses as a mere drop in the bucket amid the avalanche of debt problems that will roll down hill into the still very much up-in-the-air Fall semester. Some smaller debt-strapped universities may already be wondering if they’ll be able to keep the doors open into next year.

Authored by Lourcey Sams via Oilprice.com,

The President of the United States has the power, at his sole discretion without any other authority, to place a fee on imported oil or products. It becomes variable when a base price (floor price) is set and a fee is paid on any imports where the price on imports is below the base price. If the base price for oil was set at $50.00 per barrel and the import price is $30.00 per barrel, then an import fee of $20.00 per barrel would be paid to the United States Treasury. Likewise, if the import price (world price) is $50.00 a barrel, then no fee is paid.  Thus, the fee is variable depending on the price paid for an imported barrel. 

Covid 19 and the Oil Price War

Recently, two events, the Covid 19 pandemic and an oil price war between Saudi Arabia and Russia have had an unprecedented effect on the price of oil. Covid 19 has had a shock on demand unlike any event since 2001. This, together with Russia and Saudi Arabia flooding the market with excess crude, has sent prices sharply downward. Each event alone would have had a negative effect on oil price, however, together they have shocked the market. The impact the fundamentals of a variable import fee would have on oil price would be somewhat tempered by these two-events combined at the same time. It is the author’s belief Covid 19 will dissipate and world demand will normalize in the short term. The price war could be longer term. Irrespective, a variable import fee would have a positive effect on the oil price, yet it would be far more effective under normal market conditions.

The Effects of the Fee

The majority of the oil in the world is owned by a government and therefor a government will set the price of oil. The United States is the largest consuming nation in the world, however, because our oil is owned by private industry, the United States does not currently have a role in setting the price. We have long been held hostage to the policies of OPEC and other governments. It is estimated that the current consumption in the U.S. is approximately 20 million barrels per day. Production estimates range between 11 and 13 million barrels per day, meaning a deficit between 7 to 10 million barrels per day. If an import fee with a base price of $50.00 per barrel is placed on oil and the US imports of 7 million barrels per day then the price of the imported barrel would be $50.00 (price plus fee). Any seller would seek this price and prefer to sell to the U. S. as opposed to selling at a lower price set by some financial market indices. Likewise, other consuming nations, seeking to maintain supply, would pay a higher price to purchase oil. Purchasers in the U. S., required to rely on imports would in turn pay a higher price for domestic oil than market indices. As such, the world oil price would seek a level set by the United States base price (floor price) as set by the import fee. Accordingly, the United States, would become a vital participant in determining the world oil price

Is the United States Truly in Balance?

Prior to the crisis of Covid 19 and the price war, there was considerable evidence that production in the United States was beginning to decline. Capital expenditures in 2019 were considerably reduced. The US rig count in the year prior to the current crisis was down over 250 rigs and the Permian Basin rig count was down approximately 55 rigs. Decline curve analysis for both the Delaware Basin and Midland Basin showed a decline prior to the two crises. Texas Railroad Commission data also indicated an oil production decline. It has been reported that the United States was near or at energy independence.

The U.S. Energy Information Administration (EIA) states on their website “EIA is not able to determine exactly how much crude oil may originally have been imported from other countries, placed in storage, and then exported. The United States also produces and exports petroleum products, but EIA is unable to track how much of these petroleum exports are made from domestic produced or imported crude oil. Also, some U. S. crude oil exports are refined into petroleum products in other countries, which may be exported back to, and consumed in, the United States.”

In other words, the U. S. is a net importing country. Remove U. S. crude oil imports and the U.S. would be unable to produce current petroleum refined products for consumption or export. This deficit will only balloon in the current environment. Capital expenditures were already considerably reduced in 2020 prior to the current crisis, but with recent announced reductions and cuts, it becomes alarming. Further, most of the recent increase in production in the U. S., is attributable to the “shale” plays. Shale production is not truly reserved based. Large capital expenditures result in high deliverability with hyperbolic declines. Massive reduction in capital expenditures will result in large production declines and a wider deficit.

Benefits and Energy Security

A variable import fee on United States imported oil or products with a floor price of $50.00 will set the U. S. price and hence the world price at $50.00. This would provide a stabilizing effect on the U. S. oil industry. Capital budgets could be set at reliable numbers with confidence. Bank debt would be secured and reliable. Jobs could be saved within predictable cash flow. In short, a critical oil industry would be stabilized. The United States needs energy security and a stable growing domestic industry is needed to provide energy security. The U. S. military presence in the Middle East is to provide a stable flow of oil and to provide energy security. Recent innovations by the U. S. oil industry have shown we can go a long way toward energy independence and energy security. The price war has as much to do about market share and eliminating the U. S. competition than any other factor.

2020 is shaping up to be nothing short of a complete and total meltdown for the U.S. auto industry.

The industry was already barely holding on by a thread before the coronavirus pandemic started, with China leading the rest of the globe’s auto industries into recession over the last 18 months. Now, in a post-coronavirus world, automakers in the U.S. are expecting nothing less than full collapse.

And the things that were barely holding the industry up to start 2020, namely low rates and modest consumer confidence, don’t matter. Businesses are closed, would-be buyers are strapped for cash and the country’s economy has simply been turned off. The industry’s annualized selling rate could slow to 11.9 million in March, according to Edmunds.

Jessica Caldwell, executive director of insights for market researcher Edmunds, told Bloomberg: “The whole world is turned upside down right now.”

The coronavirus lockdowns across the nation will also put a damper on April, which is traditionally a good month for auto sales. Ford is all but shutting down and names like Fiat and GM are expected to release extremely weak numbers later this week.

Morgan Stanley analyst Adam Jonas put it simply: “There are basically no U.S. auto sales right now. Investors have fully embraced the reality that the U.S. auto industry may be shut down for one or two full months. We’re now being asked to run scenarios of six-month or nine-month shutdowns.”

The President’s extension of his social distancing guidelines to the end of April will also act as a headwind for the industry. Factory shutdowns that started in March will now head toward their second month of no production, as the U.S. consumer, for the most part, remains stuck at home. 

Jeff Schuster, senior vice president of forecasting for research LMC Automotive commented: “We just don’t know when and how this ends, and that’s the biggest problem right now. All of this uncertainty creates a lot of angst and that has been spreading really like a wildfire through the industry.”

He predicts that the industry’s annualized selling rate will continue to plummet to between 9 million and 10 million vehicles. Those numbers are well below the 10.4 million autos sold in 2009, the year GM and Chrysler both filed for bankruptcy. J.P. Morgan has an even more pessimistic view, with estimates of a pace of 6 million to 7 million vehicles over the next month.

More data is on its way on Wednesday, when most automakers will report quarterly data. The results are expected to be grim, despite many people expecting the declines. 

Richard Curtain, University of Michigan economist and director of surveys said: “Mitigating the negative impacts on health and finances may curb rising pessimism, but it will not produce optimism. Rebuilding confidence first requires a clear and unmistakable turning point in the fight against the virus as well as continued financial support to avoid a deeper and extended recession.”

We highlighted the collapse of the industry in China in February, where industry wide, sales fell 79% in February, marking the biggest ever monthly plunge on record.

Authored by J.D.Tuccille via Reason.com,

Could the stalled economy we’ve inflicted on ourselves in our frantic efforts to battle the COVID-19 pandemic lead to civil disorder? History suggests that’s a real danger.

Around the world, high unemployment and stagnant economic activity tend to lead to social unrest, including demonstrations, strikes, and other forms of potentially violent disruptions. That’s a huge concern as forecasters expect the U.S. unemployment rate in the months to come to surpass that seen during the depths of the Great Depression.

“We’re putting this initial number at 30 percent; that’s a 30 percent unemployment rate” in the second quarter of this year as a result of the planned economic shutdowns, Federal Reserve Bank of St. Louis President James Bullard told Bloomberg News on March 22. Gross Domestic Product, he adds, is expected to drop by 50 percent.

Unlike most bouts of economic malaise, this is a self-inflicted wound meant to counter a serious public health crisis. But, whatever the reasons, it means businesses shuttered and people without jobs and incomes. That’s risky.

“Results from the empirical analysis indicate that economic growth and the unemployment rate are the two most important determinants of social unrest,” notes the International Labour Organisation (ILO), a United Nations agency that maintains a Social Unrest Index in an attempt to predict civil disorder based, in part, on economic trends. “For example, a one standard deviation increase in unemployment raises social unrest by 0.39 standard deviations, while a one standard deviation increase in GDP growth reduces social unrest by 0.19 standard deviations.”

Why would economic shutdowns lead to social unrest? Because, contrary to the airy dismissals of some members of the political class and many ivory-tower types, commerce isn’t a grubby embarrassment to be tolerated and avoided—it’s the life’s blood of a society. Jobs and businesses keep people alive. They represent the activities that meet demand for food, clothing, shelter—and that develop and distribute the medicine and medical supplies we need to battle COVID-19.

President Donald Trump may be overly optimistic when he hopes to have the country, including areas hard-hit by the virus, “opened up and just raring to go by Easter,” but he’s not wrong to include the economy in his calculations.

By contrast, New York Gov. Andrew Cuomo’s insistence that “if it’s public health versus the economy, the only choice is public health,” sounds fine and noble. But it reflects an unrealistic and semi-aristocratic disdain for the activities that make fighting the pandemic possible at all—and that keep social unrest at bay.

While the ILO has tried to quantify the causes of social unrest, its researchers certainly aren’t the first to make the connection between angry, unemployed people and trouble in the streets.

At the height of the Great Depression, when U.S. unemployment hit a peak of 24.9 percent, Franklin Delano Roosevelt’s administration saw make-work programs such as the Civilian Conservation Corps (CCC) as a means of getting the jobless—especially young men—safely into “quasi-military camps often far from home in the nation’s publicly owned forests and parks,” Joseph M. Speakman wrote for the Fall 2006 issue of Prologue Magazine, a publication of the U.S. National Archives and Records Administration.

“Bringing an army of the unemployed into ‘healthful surroundings,’ Roosevelt argued, would help to eliminate the threats to social stability that enforced idleness had created,” Speakman added.

The program mostly worked—at least, it confined revolts to the camps themselves, where they were suppressed by Army officers. Those same officers commanded the men when they were drafted and dispatched to even more remote destinations with the coming of World War II.

In fact, the connection between unemployment, stagnant economies, and social unrest is so clear that an important indicator for a large underground economy is relative peace prevailing alongside a chronically high unemployment rate.

If 21 percent of the workforce “were jobless, Spain would not be as peaceful as, barring a few demonstrations, it has so far been, say economists and business leaders,” the Financial Times noted in 2011. Sure enough, researchers found that off-the-books businesses and jobs thrived in Spain—accounting for the equivalent of a quarter of GDP at one point—keeping people employed and defusing tensions.

Bullard of the Fed doesn’t propose shipping the jobless off to the wilderness—at least, not yet—and he doesn’t seem inclined to rely on the black market to keep people fed, warm, and healthy. Instead, to defuse the impact of the social-distancing shutdowns of normal economic activity, he calls for lost income to be replaced by unemployment insurance and other payments that would make displaced workers and business owners whole.

He better be right that government checks—drawing on money from the thin air and not generated by an economy that has largely halted, I’ll note—can offset the pain of lost jobs and businesses, because the first wave of the unemployment he predicts is already here.

“In the week ending March 21, the advance figure for seasonally adjusted initial claims was 3,283,000, an increase of 3,001,000 from the previous week’s revised level,” the United States Department of Labor announced on Thursday, March 26.

“This marks the highest level of seasonally adjusted initial claims in the history of the seasonally adjusted series.”

Those disturbed by such economic collapse include public health professionals who take COVID-19 very seriously.

“I am deeply concerned that the social, economic and public health consequences of this near total meltdown of normal life—schools and businesses closed, gatherings banned—will be long lasting and calamitous, possibly graver than the direct toll of the virus itself,” wrote David L. Katz, former director of Yale University’s Yale-Griffin Prevention Research Center, in The New York Times last week.

“The stock market will bounce back in time, but many businesses never will. The unemployment, impoverishment and despair likely to result will be public health scourges of the first order.”

Unemployment, impoverishment, and despair are frightening outcomes in themselves. They’re also a recipe for social unrest that will afflict even those of us who weather both the pandemic and the accompanying economic storm.

Another bombshell “conspiracy” raising serious questions over the coronavirus pandemic and China’s biological weapons research and espionage programs goes mainstream.

A now viral investigative report based on a newly released FBI document authored by no less than the Chemical and Biological Intelligence Unit of the FBI’s Weapons of Mass Destruction Directorate (WMDD) finds that a Chinese scientist was caught under extremely suspicious circumstances transporting vials believed to contain the deadly MERS and SARS viruses into the United States.

“In late November 2018, just over a year before the first coronavirus case was identified in Wuhan, China, U.S. Customs and Border Protection agents at Detroit Metro Airport stopped a Chinese biologist with three vials labeled ‘Antibodies’ in his luggage,” the lengthy report by Yahoo News begins.

“Inspection of the writing on the vials and the stated recipient led inspection personnel to believe the materials contained within the vials may be viable Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS) materials,” the report reads.

The unnamed scientist claimed he was asked to deliver the vials to a US institute, though the FBI report also fails to identify the recipient. “But the FBI concluded that the incident, and two other cases cited in the report, were part of an alarming pattern,” Yahoo News reports.

“The Weapons of Mass Destruction Directorate assesses foreign scientific researchers who transport undeclared and undocumented biological materials into the United States in their personal carry-on and/or checked luggage almost certainly present a US biosecurity risk,” the FBI report states.

“The WMDD makes this assessment with high confidence based on liaison reporting with direct access,” the FBI report adds.

Suspected SARS virus and flu samples found in luggage: FBI report describes China’s ‘biosecurity risk’ https://t.co/Rf7MlBXLcf pic.twitter.com/l3MqBe4iLR

— Yahoo News (@YahooNews) March 30, 2020

The report cites US military experts who speculate it could be part of a broader Chinese program aimed at stealing US state secrets and research, and further that such foreign nationals caught with the materials might be unwitting mules, but regardless the case is part of an “alarming pattern”. 

Other additional and more recent instances detailed in the report, such as in September 2019, detailed a separate case of a Chinese national’s attempt to sneak vials of H1N1 influenza samples into Dallas.

Needless to say, as we reviewed precisely in past reporting related to the Wuhan Institute of Virology and its ‘coincidental’ proximity to the market where COVID-19 is claimed to have first emerged, the potential for deadly pathogens to ‘escape’ through mishandling during such haphazard airport trips by individuals trying to sneak vials across borders is high. 

And this is where the Yahoo News report pivots to the subject and main questions of our own reporting of two months ago, which readers may remember, was deeply triggering for Buzzfeed and others who set themselves up as gatekeepers policing and ensuring acceptance of only what they narrowly deem ‘acceptable’ analysis and questions: “the FBI appears to be concerned with dual-use research that would be used for bioterrorism,” the report emphasizes.

Digging deeper into what we were all told is supposed to be a mere deranged conspiracy theory the Yahoo News authors then make the direct connection between COVID-19 and the aforementioned potential for bioterrorism: 

The report, which came out more than two months before the World Health Organization learned of a cluster of pneumonia cases in Wuhan that turned out to be COVID-19, appears to be part of a larger FBI concern about China’s involvement with scientific research in the U.S. While the report refers broadly to foreign researchers, all three cases cited involve Chinese nationals.

And just to underscore further potentially what we’re dealing with in terms of likely threats, the FBI itself said it approached and investigated the Detroit MERS/SARS airport case and others ultimately out of biosecurity and bioterrorism concerns.

“The FBI report refers to both biosecurity, which typically refers to the intentional misuse of pathogens, such as for bioterrorism, and biosafety, which covers accidental release. The FBI declined to comment on the report,” it continues.

So it now appears the FBI itself has long been closely following Chinese military bioweapons research as well as dangerous pathogens’ mishandling and ‘misuse’ in relation to unique deadly respiratory viruses, and asking the relevant and obvious questions. Glad to know we’re not alone.

Authored by Sven Henrich via NorthmanTrader.com,

The more I read and observe the clearer the message: Nobody knows anything. And by that I mean nobody truly knows how any of this will turn out and I think this point needs to be driven home more clearly.

Tons of projections of this, that and the other. Just stop. I happen to think there are times to simply step back and not make grand predictions. For us that’s ok because we focus primarily on market technicals and that’s an ever evolving picture that offers us pivot points to decide when and where to get engaged in.

But on the macro? Give me a break. Nobody knows anything. Everybody is just guessing.

Exhibit A: GDP forecast for Q2:

Ok great. How’s that helping anyone in trying to value companies, cash flow, revenues, earnings? It doesn’t. -9% is a completely different planet than -40% and so is everything in between.

How does one qualify central bank and stimulus intervention? It changes every single day. Today the Fed cranked out an international repo program. Global central banks unite I guess. Also today Donald Trump tweeted about a $2 trillion infrastructure program. Who knows if it will happen. The Fed already increased its balance sheet by $1.3 trillion since the same time last year and may well be heading toward $9  or $10 trillion balance sheet position within a year. Last week they added $600B, basically all of QE2 in a week.

These are insane numbers thrown around, all on top of the $2.2 trillion stimulus package just passed. What’s the deficit going to be? I guess it depends on whether GDP drops by 40% or 9%.

Give me a break. How do you make any forecasts that have a predictive meaning whatsoever in this environment? Other than a lucky guess, the answer is nobody. Why? Because nobody knows anything.

Which is really no surprise because because nobody knew anything to begin with:

Crude to below $20
10 year to below 0.4%$SPX to below 2,200$VIX to 86

…had predicted nobody on Wall Street. Not even close.

So take all predictions with a huge grain of salt.
Never stop thinking for yourself.

— Sven Henrich (@NorthmanTrader) March 30, 2020

What are the long term consequences of $4-$5 trillion in Fed intervention and perhaps $4 trillion in fiscal stimulus (which is short hand for more debt)?

Nobody knows. The MMT crowd will tell you it won’t matter because debt doesn’t matter.

Well, we can all take a stab at a joke here:

By the time this crisis is over.

h/t @satoshidisco pic.twitter.com/LqnCHiSIoY

— Sven Henrich (@NorthmanTrader) March 31, 2020

What irks me more than anything is the hypocrisy of it all. Yes I could whine about politicians that once pretended to care about deficits but now no longer do, but that serves no purpose.

But the hypocrisy of Janet Yellen today is something else:

“We’ve dumped rates into the gutter for the past 11 years and now we’re complaining about too much corporate debt” – Fed geniuses. pic.twitter.com/N4VYzFQs8C

— Sven Henrich (@NorthmanTrader) March 31, 2020

Give me a break. For years the likes of me have been warning about the debt explosion and the consequences of which. And now one of the key enablers (may I even say architect) of the entire cheap money construct that enabled all this debt explosion in the first place is now warning about high levels of corporate debt being possibly a bad thing?

Too little, too late, and now they’re telling us all it’ll be fine. More debt. Yea, that’s the solution. It’s worked so well so far.

Coronavirus? Sure we can hope for the best and I, like everybody else, am hoping we will soon see the peak and it’s over by the summer and we can all recover. And while Italy and China and South Korea appear to be slowing the US, the UK and others have yet to reach their peak. And what does slowing really mean? That the virus is disappearing or just held at bay by our social distancing measures? If that’s the case then it may as well come back as soon as we relent on these measures. Do we have a cure? A vaccine? No, not yet. Yes we can hope for the best and that one will be developed, but but it may also not come in time for the next season, if this virus turns out to be seasonal. And if that’s case we get to do this all over again next year. But many will have immunity? Sure, if the virus doesn’t mutate.

Lots of unknowns, lost of uncertainties and lots of predictions. My view fwiw:

If half predict a strong and quick recovery and the other half predict doom and gloom we may just end up in an extended period of massive chop, uncertainty and wide price ranges.

— Sven Henrich (@NorthmanTrader) March 31, 2020

So treat all predictions by anybody with a huge grain of salt. Nobody knows anything.

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Another day, another press conference, after markets took a digger into the close following an optimistic start to the session.