Apr 9th 2020
EXTRACTS: "......... The average bankruptcy takes 260 days to work out. During that period, businesses will have a hard time rebuilding..........consider the complexity of the global supply chain. More than 90% of Fortune 1,000 companies have at least one tier-2 (secondary) supplier in Hubei, the Chinese province around Wuhan............disturbingly, 40% of all US corporate debt was rated BBB, just above junk, going into the crisis, while only 30% of the world’s outstanding stock of non-financial corporate bonds were rated A or above.......... Despite central bank interest-rate cuts, borrowing costs for companies are now rising dramatically. With further downgrades from credit ratings agencies all but guaranteed, especially with many big earnings announcements due after Easter, some companies will lose access to credit altogether. Moody’s estimates that the default rate for junk-rated companies could hit an astounding 10%, compared to a historical average of 4%.........flu vaccines are relatively ineffective. They reduce your risk of becoming ill by 40% to 60%, compared to 97% for measles vaccines and 88% for mumps........ Lockdowns might end, while other measures like social distancing, limits on gatherings and travel restrictions continue – perhaps on a seasonal basis...... South Korea could be a glimpse into the future. It has so far avoided an Italian-style health crisis without a lockdown, but has still imposed various restrictions on the economy."
Apr 8th 2020
EXTRACT: "A recent study, published in the British Medical Journal, suggested that 78% of people with COVID-19 have no symptoms. The findings are in line with research from an Italian village at the epicentre of the outbreak showing that 50%-75% were asymptomatic, but represented “a formidable source” of contagion. A recent Icelandic study also showed that around 50% of those who tested positive to COVID-19 in a large-scale testing exercise were asymptomatic. Meanwhile, a WHO report found that “80% of infections are mild or asymptomatic, 15% are severe infections and 5% are critical infections................The new BMJ study is seemingly different to the findings of studies from earlier in the pandemic, which suggested that the completely asymptomatic proportion of COVID-19 is small: 17.9% on the Diamond Princess Cruise Ship and 33.3% in Japanese people who were evacuated from Wuhan.”
Apr 8th 2020
EXTRACT: "Spooked by COVID-19, Americans not only stripped supermarket shelves of toilet paper and pasta, but also drove gun sales higher than ever. Apparently, many of these recent gun buyers never purchased a firearm before. Lobbyists for the US gun industry want gun stores to be counted as “essential” businesses, like food shops and pharmacies. A number of states have readily complied, as has the Department of Homeland Security. Jay Pritzker, Governor of Illinois, declared that “firearm and ammunition suppliers and retailers, for purposes of safety and security” should indeed be allowed to continue supplying these alleged necessities."
Apr 8th 2020
EXTRACT: "........until the health crisis is resolved, the economic situation will look exceedingly grim. And even after an economic restart, the damage to businesses and debt markets will have lingering effects, especially considering that global debt was already at record-breaking levels before the crisis began..............Given that the 2008 financial crisis produced deep political paralysis and nurtured a crop of anti-technocratic populist leaders, we can expect the COVID-19 crisis to lead to even more extreme disruptions. ............it is possible that stock-market losses so far have been less than those of 2008 only because everyone remembers how values shot back up during the recovery. But if that crisis does turn out to have been a mere dry run for this one, investors shouldn’t expect a quick rebound."
Apr 5th 2020
EXTRACT: "We are feeling the anxiety effects of not one pandemic but two. First, there is the COVID-19 pandemic, which makes us anxious because we, or people we love, anywhere in the world, might soon become gravely ill and even die. And, second, there is a pandemic of anxiety about the economic consequences of the first. These two pandemics are interrelated, but are not the same phenomenon......................a contagion of financial anxiety works differently than a contagion of disease. It is fueled in part by people noticing others’ lack of confidence, reflected in price declines, and others’ emotional reaction to the declines. A negative bubble in the stock market occurs when people see prices falling, and, trying to discover why, start amplifying stories that explain the decline. Then, prices fall on subsequent days, and again and again."
Apr 5th 2020
EXTRACT: "Given the shortage of testing kits for COVID-19 around the world, the current testing regimen includes primarily (if not exclusively) symptomatic patients, making the rate of death appear to be worse than it might actually be. According to the US Centers for Disease Control, asymptomatic persons are not routinely tested, so the prevalence of asymptomatic infection and detection of pre-symptomatic infection is not well understood.[i] Similarly, a high percentage of patients who are either elderly or have underlying medical conditions that make them more susceptible to succumbing to the virus may test positive and die, skewing the rate of death among younger, otherwise healthy individuals. Death rates among persons over 80 years of age have been as high as 20%."
Apr 2nd 2020
EXTRACT: "Whenever the crisis has passed, there will be numerous studies of what happened and why. The hardest question to face, and one that will be long debated, is how many people died needlessly as a result of Trump’s leadership."
Apr 1st 2020
EXTRACT: "Locking down the economy is correctly viewed as a way to buy time to expand capacity and reduce the peak-load demand on health systems. But it is not a complete strategy. Even when combined with monetary accommodation and a large fiscal program geared toward protecting vulnerable people and sectors, an economic deep freeze cannot be sustained without eventually imposing unacceptable costs on individuals and society."
Apr 1st 2020
EXTRACT: "Kentucky Senator Rand Paul’s behavior over the past two weeks is exactly what’s wrong with America’s response to COVID-19. Paul has a compromised lung, so he decided that he should be tested for the disease out of an abundance of caution. From the time of his test until he was confirmed positive six days later, Paul did nothing to protect those around him. On the contrary, he met with other senators, cast votes on the Senate floor, played a round of golf at a private club, and even squeezed in a few laps at the Senate pool. In the countries that have contained the coronavirus outbreak, such irresponsible behavior has not been tolerated, and even could have landed Paul in jail. As a physician (ophthalmologist), he, more than anyone, should know that if he was concerned enough about COVID-19 to be tested for it, he should have been equally concerned about the risk he was posing to others."
Mar 31st 2020
EXTRACT: "The absence of effective federal oversight and management of the COVID-19 crisis will undoubtedly be judged by historians as the biggest US governmental calamity of all time."
Mar 29th 2020
EXTRACT: " South Korea is one of the world’s most advanced countries........... But so, too, is the United States. Why, then, has the US lagged so far behind in its response to the pandemic? The short answer is that the US has a president who is fundamentally unfit for the job, both intellectually and temperamentally."
Mar 26th 2020
EXTRACT: "A large part of the fallout to date – particularly on stock markets – has actually been from negative sentiment rather than real effects."
Mar 24th 2020
EXTRACT: ".........every component of aggregate demand – consumption, capital spending, exports – is in unprecedented free fall. While most self-serving commentators have been anticipating a V-shaped downturn – with output falling sharply for one quarter and then rapidly recovering the next – it should now be clear that the COVID-19 crisis is something else entirely. The contraction that is now underway looks to be neither V- nor U- nor L-shaped (a sharp downturn followed by stagnation). Rather, it looks like an I: a vertical line representing financial markets and the real economy plummeting..............The risk of a new Great Depression, worse than the original – a Greater Depression – is rising by the day."
Mar 24th 2020
EXTRACT: "President Donald Trump and US policymakers have thus far favored piecemeal measures, especially when it comes to the state directing – indeed, reorganizing – the private sector. Their instinctive belief in the superiority of the market and private initiatives, regardless of the circumstances, leads them to recoil from the scale of government intervention needed to save our lives and livelihoods."
Mar 23rd 2020
EXTRACT: "Back in July 2019, while in Michigan for one of the early Democratic Party presidential debates, I was invited to a small dinner with Bernie Sanders. Toward the end of the meal, those who remained at the table included actor/activist Danny Glover, Dr. Cornel West, former Mayor Gus Newport, Jane Sanders, and a few key campaign staffers. What ensued was a free-flowing discussion of the agents of social and political change, sprinkled with personal recollections of and lessons learned from historical figures – many of whom had been known by my dinner companions.......I came away from that evening seeing Bernie Sanders in a different light. He was, and still is, a candidate for the presidency of the United States. At the same time, he must also be seen as a transformative figure in modern American political history."
Mar 15th 2020
EXTRACT: "Why are we more scared of what is less likely to kill us? The psychological principle that makes us fear swine flu, avian flu, or COVID-19, but not the common flu is called fear of dread risks. It is easy to elicit fear of episodes in which many people die within a short interval, such as plane crashes or epidemics. But when just as many or more people die over a longer period – as with car accidents or the seasonal flu – it is difficult to scare the public into wearing seatbelts or getting vaccinated."
Mar 11th 2020
EXTRACT: "But if containment measures fail – as we are seeing in Italy just now – the banks may still end up in trouble. They may also stop lending again, in which case the asset bubbles would collapse and a long-term recession would become a certainty. Central banks and governments would have to step in with more assistance: as well as further interest rate cuts, they look likely to try more QE and potentially bailouts like in 2007-09 if necessary. But given the limited scope this time around, if the global economy stalls for the long term, these measures might still fail and central bankers could potentially lose control of the marketplace altogether. In such a situation, we would be in truly uncharted territory." PICTURE BELOW: WORLD DEBT.
Behind the Turmoil: Russia Provoked Oil Price Fall to Protect its Markets from US Frackers, which could now Collapse
Mar 11th 2020
EXTRACT: "The Russian resistance appears to have derived from fears that if they cut back exports and OPEC managed to keep the price high, US petroleum firms using hydraulic fracturing (fracking) would simply rush in to grab Russian markets in Europe........So the theory that Russia provoked the price fall to harm US fracking companies is incorrect. They provoked it to avoid being harmed by the American producers, as they saw it."
Mar 8th 2020
EXTRACT: "I was recently walking along East 29th Street in Manhattan, after visiting a friend at Bellevue Hospital, when I was roused from my thoughts by a middle-aged white male screaming at an old Chinese man, “Get the fuck out of my country, you piece of Chinese shit!” The old man was stunned. So was I, before I bellowed back (deploying the full range of my native Australian vocabulary), “Fuck off and leave him alone, you white racist piece of shit!” The pedestrian traffic stopped. A young white guy with dark hair came storming toward me. As a non-pugilist by instinct and training, I braced for what was coming. He stopped just short of me and said, “Thank you for standing up for him. That’s why I fought in Iraq; so that people like him could be free.” "
Mar 6th 2020
EXTRACTS: "Dreyfus was originally arrested and convicted on charges of selling military secrets to Germany – France’s historical enemy. But because he was a Jew, his guilt was assumed from the start, particularly by most of the French officer corps. To ensure that the charges would stick, various conspirators fabricated evidence against Dreyfus, including a secret file that only the judges who handed down the conviction and prison sentence were allowed to see........In the Dreyfus Affair, a savagely right-wing press fanned the flames of anti-Semitism and intrigue among elites, just as Fox News does today against Trump’s enemies. Owing to these malign efforts, truth itself becomes blurred,........Most depressing of all, though, is the fact that no senior figure in the US has come forward to stand alongside Vindman. There has been no Zola to issue the equivalent of the famous “J’Accuse!” pamphlet, shaming the country’s complicit elites for their lies and corruption. Instead, men like former Secretary of Defense James Mattis, former White House Chief of Staff John Kelly, and former National Security Adviser John Bolton have put their personal interests first, remaining mostly silent......"