Tag: news

Just hours after the World Health Organization warned "It is quite unavoidable, that [Ebola] incidents will happen in the future because of the extensive travel both from Europe to the affected countries and the other way around," CDC Director Tom Frieden announced that:

• U.S. TO ANNOUNCE FURTHER TRAVEL MEASURES VS EBOLA IN DAYS: CDC

This merely confirms all suspicions and our earlier note that 'air traffic is the driver' of global contagion.

 

As Reuters reports,

Europe will almost inevitably see more cases of the deadly Ebola virus within its borders but the continent is well prepared to control the disease, the World Health Organization's regional director said on Tuesday.

 

Speaking to Reuters just hours after Europe's first local case of Ebola infection was confirmed in a nurse in Spain, the WHO's European director, Zsuzsanna Jakab, said further such events were "unavoidable".

 

Spanish health officials said four people had been hospitalized to try and stem any further spread of Ebola there after the nurse became the first person in the world known to have contracted the virus outside of Africa.

 

"Such imported cases and similar events as have happened in Spain will happen also in the future, most likely," Jakab told Reuters in a telephone interview from her Copenhagen office.

 

"It is quite unavoidable … that such incidents will happen in the future because of the extensive travel both from Europe to the affected countries and the other way around."

 

…

 

"But the most important thing…is that Europe is still at low risk and that the western part of the European region particularly is the best prepared in the world to respond to viral hemorrhagic fevers including Ebola."

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So don't panic!

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"Air traffic is the driver," warns Professor Alessandro Vespignani of Northeastern University in Boston…predicting where the virus will spread…

There is a 50 per cent chance a traveller carrying the disease could touch down in the UK by October 24, a team of U.S. researchers have predicted.

 

Using Ebola spread patterns and airline traffic data they have calculated the odds of the virus spreading across the world.

 

They estimate there is a 75 per cent chance Ebola will reach French shores by October 24.

 

And Belgium has a 40 per cent chance of seeing the disease arrive on its territory, while Spain and Switzerland have lower risks of 14 per cent each.

 

 

 

'It's just a matter of who gets lucky and who gets unlucky."

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un-contained.

via Zero Hedge http://ift.tt/1s9FIEl Tyler Durden

The summer rebound is well and truly over, and the latest nail in the short-lived rebound came moments ago when the Fed reported that in August, consumer credit rose by only $13.5 billion: only because it was far below the $20 billion expected and a plunge from the $26 billion surge in July, since revised far lower to $21.6 billion. Worse, revolving credit actually declined in the month by just over $200 million, its first decline since February. But don’t worry: while US consumers put their credit cards on ice, they had no problems continuing to borrow like drunken sailor when it comes to car and student loans, which rose to a new record high of $2.366 trillion, an increase of $13.7 billion, which still was the lowest monthly increase since January.

Total credit monthly change:

 

Revolving credit alone:

 

And student and car loans, i.e. non-revolving credit.

 

Finally, this is what an exponential chart looks like.

via Zero Hedge http://ift.tt/1s9FIo6 Tyler Durden

Scientists have said for some time that Ebola may be spread through coughing, sneezing and other aerosol transmission.

The top American health agency – the U.S. Centers for Disease Control – has denied this for months.  But CDC has finally been forced to admit that it's true.

The Los Angeles Times reports today:

Some scientists who have long studied Ebola say such assurances are premature — and they are concerned about what is not known about the strain now on the loose.

 

***

 

Dr. C.J. Peters, who battled a 1989 outbreak of the virus among research monkeys housed in Virginia and who later led the CDC’s most far-reaching study of Ebola’s transmissibility in humans, said he would not rule out the possibility that it spreads through the air in tight quarters.

 

“We just don’t have the data to exclude it,” said Peters, who continues to research viral diseases at the University of Texas in Galveston.

 

Dr. Philip K. Russell, a virologist who oversaw Ebola research while heading the U.S. Army’s Medical Research and Development Command, and who later led the government’s massive stockpiling of smallpox vaccine after the Sept. 11 terrorist attacks, also said much was still to be learned. “Being dogmatic is, I think, ill-advised, because there are too many unknowns here.”

 

***

 

“I see the reasons to dampen down public fears,” Russell said. “But scientifically, we’re in the middle of the first experiment of multiple, serial passages of Ebola virus in man…. God knows what this virus is going to look like. I don’t.”

 

Tom Skinner, a spokesman for the CDC in Atlanta, said health officials were basing their response to Ebola on what has been learned from battling the virus since its discovery in central Africa in 1976. The CDC remains confident, he said, that Ebola is transmitted principally by direct physical contact with an ill person or their bodily fluids. [Well, yes … everyone knows that physical contact with the victim or their fluids is the prime route of exposure.]

 

***

 

Finally, some also question the official assertion that Ebola cannot be transmitted through the air. In late 1989, virus researcher Charles L. Bailey supervised the government’s response to an outbreak of Ebola among several dozen rhesus monkeys housed for research in Reston, Va., a suburb of Washington.

 

What Bailey learned from the episode informs his suspicion that the current strain of Ebola afflicting humans might be spread through tiny liquid droplets propelled into the air by coughing or sneezing.

 

“We know for a fact that the virus occurs in sputum and no one has ever done a study [disproving that] coughing or sneezing is a viable means of transmitting,” he said. Unqualified assurances that Ebola is not spread through the air, Bailey said, are “misleading.”

 

Peters, whose CDC team studied cases from 27 households that emerged during a 1995 Ebola outbreak in Democratic Republic of Congo, said that while most could be attributed to contact with infected late-stage patients or their bodily fluids, “some” infections may have occurred via “aerosol transmission.”

 

Skinner of the CDC, who cited the Peters-led study as the most extensive of Ebola’s transmissibility, said that while the evidence “is really overwhelming” that people are most at risk when they touch either those who are sick or such a person’s vomit, blood or diarrhea, “we can never say never” about spread through close-range coughing or sneezing.

 

“I’m not going to sit here and say that if a person who is highly viremic … were to sneeze or cough right in the face of somebody who wasn’t protected, that we wouldn’t have a transmission,” Skinner said.

 

Peters, Russell and Bailey, who in 1989 was deputy commander for research of the Army’s Medical Research Institute of Infectious Diseases, in Frederick, Md., said the primates in Reston had appeared to spread Ebola to other monkeys through their breath.

Will the L.A. Times article finally push the CDC to require respirators for front-line healthcare workers treating Ebola patients? Or will we need a full pandemic before CDC changes its outdated policy?

The Times’ article also confirms other points we’ve been making:

• Ebola might be contagious even when the victim isn’t showing any symptoms

• Travel screening is a joke

 

via Zero Hedge http://ift.tt/1s9FInV George Washington

Just over a month ago, business media went manic when none other than David Tepper announced that it was “the beginning of the end of the bond market rally.” His word is truth and thus the world bid stocks, offered bonds and all was well in the world of status quo believers for a day or two… but then reality hit again and macro fundamentals, and collateral shortages, and so on… and now Treasury yields have broken below the Tepper-yield lows (with the 30Y -16bps from the ‘end’ of the bond bubble)… perhaps the hedge fund momentum master should stick to stocks – at least they are risk-free… oh wait.

Treasury yields from the Tepper-lows…

 

Chart: Bloomberg

via Zero Hedge http://ift.tt/1s9FJIE Tyler Durden

Confused by the most recent collapse in Emerging Markets, which if it hasn’t approached the tumble experienced in the first Taper Tantrum, will do so soon enough? Don’t be. The following two charts should put everything in perspective and yes, it has nothing to do with the soaring US Dollar (because said surge will end soon enough once everyone grasps that Fed QE is coming right back) and everything to do with the slowdown in Chinese credit creation.

First, a quick thought from Goldman:

A major headwind to EM GDP growth has been the slowing of China’s economic growth. During the early 2000s, China was a primary driver of broad EM growth, posting real GDP growth above 14% in 2007. China has become increasingly important, as evidenced by the rising correlation between China’s growth and “EM ex-China” growth, which has been steadily increasing since the early 1990s. Given the widely accepted view that China’s GDP growth is set to slow in coming years investors are searching for a new source to accelerate EM growth vs. DMs.

In other words: EM growth is first and foremost about what that epic, until recently at least, creator of $25 trillion in credit inside money is doing (or not doing as the case right now is).

 

So what is China doing? As per the Goldman wavefront basket showing the real time change in various economic growth indicators, something very quick and sudden:

Oops.

Bottom line: either China restarts its $1 trillion/quarter credit creation dynamo, which it can’t as it is already full to the brim with NPLs and has long-crossed the point of Ponzi Finance in the Minsky diagram, or the EMs get it…. followed promptly thereafter by the DMs. After which we give the Fed 4-6 weeks before it returns to doing the only thing it does well: print.

via Zero Hedge http://ift.tt/1pMOJ0e Tyler Durden

We noted earlier the insider's account of the dismal protocols in place for managing Ebola in Spain's hospitals… but a picture paints a thousand highly contagious words…

This is how a spanish hospital is isolating an ebola-infected nurse

The spanish government has been dismantling public hospitals ever since they won the elections.

 

"It was reported at the outset that no protocols or realistic training to address this situation because they are procedures for which you must train: you can not teach a person to put on a suit that costs so much to put it in 20 minutes , "

This is the first case of ebola detected in Europe and the spanish government is to blame for it.

Source: Publico

via Zero Hedge http://ift.tt/1s7bMHP Tyler Durden

Wolf Richter   www.wolfstreet.com   http://ift.tt/Wz5XCn

Germany, the largest economy in Europe, the miracle economy that is being held up as example of how an economy should be run, and the all-powerful engine that is supposed to pull the Eurozone out of its deep mire, is sinking into a mire of its own.

When second quarter GDP “unexpectedly” – a word now attached to much of the economic data coming out of that country – declined 0.2% from the first quarter, it wasn’t taken seriously. It was a blip, supposedly. The third quarter would more than make up for it, by some miracle of German efficiency or industriousness, presumably. I called it, “German Economy Swoons.”

Shoes have been dropping ever since. Yesterday, it was reported that demand for German goods dropped 5.7%, the worst monthly drop since 2009. Foreign orders plunged 8.4%, with orders from the Eurozone down 5.7%, but orders from all other countries – and that includes Germany’s two largest and all-important export destination outside the Eurozone, China and the US – down a fabulous 9.9% (made me wonder what the statisticians did to keep it out of the double digits, which would have been utterly embarrassing).

The problem with orders is that they lead export-addicted German GDP: if orders drop, so does GDP, but with a quarter lag. And orders have taken a decided turn south [This Chart Shows How Plunging German Factory Orders Sink the Economy].

Today, another shoe dropped. Industrial production fell 4.0% in August on a monthly basis and 3.0% year over year, after a rise of 1.6% in July, seasonally and working-day adjusted. The worst monthly drop since January 2009.

That these comparisons to January 2009 are suddenly reappearing is unnerving: the first quarter that year, the economy fell off a cliff, with GDP plummeting 4.1% from the prior quarter. No German industrialist will ever forgot those months when orders and exports simply dried up.

The rallying cry this time around? “There is no reason to panic,” said Andreas Rees, chief German economist at UniCredit MIB.

Energy, which has been on a long-term decline, rose for a change by 0.3%. For the rest, it was dreary: production of consumer goods fell by 0.4% and intermediate goods by 1.9%. Construction was down 2.0%. And production of capital goods, a critical indicator of business investment, plunged 8.8%.

Average production in July and August was 0.7% lower than the average in the second quarter – and that second quarter was that infamous one when the German miracle economy had “unexpectedly” shrunk by 0.2%.

All hopes are now on September. It would have to pull Germany out of its deepening malaise. It would have to be powerful. It would have to crank hard to prevent the economy in the third quarter from continuing its decline. But September already doesn’t look that hot. Markit’s Retail PMI, which surveys 400 retailers about month-to-month changes in retail sales, plummeted to 47.1 (below 50 = contraction), to the worst level since April 2010, unnervingly close to that terrible year of 2009.

“Signaling an accelerated contraction in German retail sales,” is how the report phrased it. Germans are closing their wallets: 39% of the retailers reported year-over-year sales declines. And the mood of German consumers, dour perhaps by nature but which recently had been riding on a wave of near-euphoria, is curdling once again.

With sales falling, retailers did what retailers do: they lowered their purchasing activity in September, after already having cut their orders in August. With “sharply declining” gross margins, retailer profits continued to sag for the 46th month in a row. Yet they’ve increased hiring, in the hope – because that’s all that’s left – things would turn around soon.

The image that emerges with increasing clarity is ugly for the Eurozone. Germany isn’t going to pull out anything. The miracle economy turns out to be an economy like all others where consumers are taxed until they suffocate, where economically important trade partners such as France and China are teetering, and where additional problems, such as the sanctions against Russia, make life miserable for exporters.

And so in the third quarter, Germany’s economy might decline once again. It would be the second quarter in a row of declining GDP. It wouldn’t be an official recession (which takes other data points into account as well), but it would qualify as a technical recession. And then it would take a true Q4 miracle – of which there aren’t any on the horizon just yet – to pull out the year.

The German stock market, which for years soared from record to record regardless of any underlying problems, has rolled over, down 9.6% since its peak earlier this year. And now it even hit the over-hyped IPO market. This shouldn’t have happened. Where is the euphoria? Read…   IPO Mania Collapses in Germany

via Zero Hedge http://ift.tt/1s7bMHG testosteronepit

Via Deutsche Bank’s George Saravelos,

Euroglut: a new phase of global imbalances

This report argues that both “secular stagnation” and “normalization” are incomplete frameworks for understanding the post-crisis world. Instead, “Euroglut” – the global imbalance created by Europe’s massive current account surplus will be the defining variable for the rest of this decade. Euroglut implies three things: a significantly weaker euro (we forecast 0.95 in EUR/USD by end-2017), low long-end yields and exceptionally flat global yield curves, and ongoing inflows into “good” EM assets. In other words, we expect Europe’s huge excess savings combined with aggressive ECB easing to lead to some of the largest capital outflows in the history of financial markets.

Introducing Euroglut

The dust is settling on the Global Financial Crisis, and markets are now focusing on the future. One prominent line of thinking is that the new normal is “secular stagnation” – weak trend growth and very low neutral rates. Another view is that “normalization” is around the corner – growth will soon return, and policy will inevitably normalize faster, particularly in the US. In this piece, we argue that both the “normalization” and “secular stagnation” frameworks are incomplete. Instead, it is Europe’s huge savings glut – what we call euroglut – that will drive global trends for the foreseeable future. While euroglut seems similar to “secular stagnation”, the asset price conclusions are very different and far more powerful.

What is Euroglut?

Euroglut is a global imbalances problem. It refers to the lack of European domestic demand caused by the Eurozone crisis.

 

The clearest evidence of Euroglut is Europe’s high unemployment rate combined with a record current account surplus. Both are a reflection of the same problem: an excess of savings over investment opportunities. Euroglut is special for one and only reason: it is very, very big. At around 400bn USD each year, Europe’s current account surplus is bigger than China’s in the 2000s.

 

If sustained, it would be the largest surplus ever generated in the history of global financial markets. This matters.

Domestic policy implications

A domestic implication of euroglut is that FX weakening will not be an effective policy response. Does the euro-area need an even bigger trade surplus? Europe faces a problem of domestic, not external demand. The global environment is hardly conducive to export-led growth either. Japan has engineered a close to 50% appreciation in USD/JPY yet exports have failed to recover.1 This lack of FX responsiveness does not mean that the ECB doesn’t care. Absent fiscal policy or other “animal spirit”-boosting initiatives, there is very little left for the central bank than to push yields and the currency lower. QE in Europe will be ineffective, but it will happen anyway – it is the only tool the ECB has to protect its mandate.

Global impact

Euroglut means that as the world’s biggest savers, Europeans will drive international capital flow trends for the rest of this decade. Europe will become the 21st century’s largest capital exporter. This statement is close to an accounting identity – a surplus on the current account implies capital outflows elsewhere. Our premise is that the next few years will mark the beginning of very large European purchases of foreign assets. The ECB plays a fundamental role here: by pushing down real yields and creating a domestic “asset shortage”, it is incentivizing European reach for yield abroad. 3 Think about policy over the next few years: at least 500bn-1trio of excess cash will be sitting in European bank accounts “earning” a negative rate of 20bps. In the meantime, asset-purchases will drive yields down across the board – there will be nothing with yield left to buy. The asset implications are huge:

1. Currency weakness. As equity, fixed income and FDI outflows pick up, the euro should face broad-based weakening pressure. Our end-2017 forecast for EUR/USD is 95cents.

 

2. Very flat fixed income curves. What will Europeans buy? With the US Treasury – bund yield spread at record highs, US fixed income should be a primary beneficiary of European demand. “Secular stagnation” implies a low terminal Fed rate resulting in low long-end yields. “Euroglut” suggests that the level of neutral Fed funds doesn’t matter. If there is sufficient demand for longdated instruments, the US 10-yr yield could easily trade below terminal Fed funds. It happened during the 2000s “bond conundrum”, it is even more likely now – global imbalances are bigger.

 

3. Good EM could survive. The Global Financial Crisis has seen a rotation of current account surpluses away from EM to Europe. At face value, this makes EM more vulnerable. But the sum of countries’ current account surpluses is larger now than before 2008, so there is more spare capital around. European current account recycling should mean that the marginal demand for EM assets is likely to go up, not down.

Beyond the Eurozone

Just like China’s surplus drove most Asia policy in the 2000s, Euroglut will drive policy across Europe. Two economies are already imposing currency floors to fight off euro weakness (Switzerland and Czech Republic) and one more has imposed negative rates (Denmark). Scandinavia, Switzerland and the CE3 economies are likely to face continued pressure to ease more. All these countries are running current account surpluses, meaning the potential for European capital outflows is even larger. We could see an amplification of Euroglut: most of the European continent could end up with negative rates or FX managed-regimes.

Conclusion

“Secular stagnation” and “normalization” rely on views around trend growth but ignore global imbalances. It is these that remain the most important feature of the global financial system. Europe is the new China, and via large demand for foreign assets, it will play a dominant role in driving global asset price trends for the remainder of this decade.

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Ironic that this report should come out alongside the Bundesbank’s comments blasting Draghi.

via Zero Hedge http://ift.tt/1s7bMrh Tyler Durden