Whatever will I write about on a no-data Monday? I won- WTF?????
Whatever will I write about on a no-data Monday? I won- WTF?????
Yesterday I was wondering what I might write about today, as there is absolutely *no* data being released. And then I woke up and turned on the intertoobs . . . .
OK. Deep breaths. For those of you who wonder what the h#/! Is going on, here’s my take.
1. Until resolute government action is taken, the coronavirus situation is going to continue to worsen. As of yesterday, we passed 500 known cases. There were probably about 5000 other people walking around the US last week infecting others. As I wrote yesterday, as a working model I expect all metrics to double roughly each week – or, add a digit before the decimal point about once every 25 days.
China and now South Korea have shown that intensive testing, treatment, and mandatory social distancing can beat back the virus. We have Trump. Based on that, if you were trying to measure what might happen to business sales and profits over the next 3 months, how would you act as every day passes without the necessary action?
2. Putin – ever cold-bloodedly shrewd – has chosen this moment when he senses his adversaries have enhanced vulnerability to make a power play in the oil market. His targets are (1) the Saudis, who he wants to see invest $$$ in Russia, and bend to Russia’s Middle East ambitions, and (2) the US fracking industry, that he would like to weaken and maybe have his oligarchs take a big stake in.
As in 2016, this will benefit US consumers in the aggregate even as it delivers pain to the Oil Patch. If it continues, paradoxically it will help defeat Trump, for the same reason that the weak economy helped him in 2016.
Because the oil move is a contest between two actors – Putin and Muhammad bin Salman – its outcome, and the timing of that outcome, depends on how they behave. They could make peace tomorrow. Or next week. Or next month. Or next year. Or not at all.
3. Even in the worst case scenarios, both of the two issues above are temporary moves. How temporary, and how bad it gets in the meantime, it is impossible to say. As I’ve been writing for the past few weeks, I expect the news to outrun the data. Every rational scenario strongly indicates we are probably heading into a recession right now. But the data does not show that yet.
That being said, the move in stocks and bonds is obviously very emotional, and could reverse at any time. Emotional moves like this tend to be close to a bottom. It is driven by short term traders rather than long term investors. People whose investment horizons are longer than a couple of years should not panic.
What makes the issue of Coronavirus serious is the squatter occupying the White House keep boasting, saying it is no worse than the flu as he walks around. Maybe they stick him in a sanitizing chamber each time when he gets back to the White House? I can not imagine someone not taking precautions; but, he believe he is invincible at least until a very tiny virus which can not be seen by the naked eye (explained it so he could understand it), kicks his ass. He is in his seventies and vulnerable. I am not wishing he gets it; but, he is tempting fate.
With regard to the Saudis and the Russians, I am going to bet on MBS. They have more money. I wrote my financial person very early yesterday morning well before the stock market openned. In my email, I told him I assumed it was too late to move our funds into a fixed interest account. And added, the market will come back in time and the damage will pass.
Good summary. You see what I saw also and was explaining to my wife.
I think the “oil patch” is the biggest problem in the next nine months.
Everything from Texas upward and even states like Pennsylvania have so much riding on fracking, and at these prices, those jobs will disappear into the atmosphere like so many fuel pump drips until prices go back up.
What are these resolute actions? Cancel the NCAA for a start? Shift to TV only campaigning? Cancel the remaining primaries and just go with Joe and DJT? Outlaw cash transaction? COVID-19 seems slightly more lethal than influenza, but the calculations are likely too high. Not terribly contagious, but not nothing either. Plus Trump senses that no matter what is done or not, there will be a loud Democrat and media Greek chorus screaming it is exactly wrong.
Here a little of Trish Reagan for you:
Regan opened her program with a graphic that said “CORONAVIRUS IMPEACHMENT SCAM” as she blamed Democrats for the plummeting stock market that came as a result of the coronavirus outbreak, which has killed 26 and infected over 700 Americans as it ripples across the nation.
If you too, think this particular virus is akin to the flu, wow, just wow.
How is it possible that the US has no idea how many tests have been done?
Trump hallowed out our response team, and had led us to this point. He did not invent this virus it is certainly not his fault. The response certainly is.
“Who the Hell Wants Another Four Years of This?
Will the deserted subways be enough? Will the empty arenas and ballparks be enough? Is the plunging stock market enough? When the ambulances start hauling away the old folks down the block, will that be enough?
As the weekend rolled on, and as the president*’s deranged performance at the Centers for Disease Control became an iconic moment in executive incompetence, I remembered reading something in The New York Times during the Obama Administration about a guy who went all over the world, and deep into the boondocks, to help various countries fight malaria. So, in a desperate attempt to escape into the past, I looked it up again.
‘After a knee-to-knee chat with this hamlet’s chief in the local malaria clinic as rain hammered the tin roof, Rear Adm. R. Timothy Ziemer reached into his pocket for his usual thank-you gift. The clinic was well run, and there was a big turnout of mothers grateful for the free mosquito nets. Accepting the thick gold-colored coin with President Obama’s face on it, the chief looked as thrilled as if he had won the Presidential Medal of Freedom…
Although he does nothing to court publicity in status-obsessed Washington, many malaria fighters call him one of the most quietly effective leaders in public health. “All the organizations fighting malaria work more closely than they did eight years ago,” said Ray Chambers, the private equity investor and co-founder of Malaria No More who is now the United Nations Secretary General’s Special Envoy for Malaria. “I think that’s due in no small part to Tim and his personality. He’s not seeking individual credit and he works for the team — but his trains run on time.”’
Gee, I wondered, whatever happened to that guy, and why isn’t he working on our current pandemic? From the Washington Post:
‘The top White House official responsible for leading the U.S. response in the event of a deadly pandemic has left the administration, and the global health security team he oversaw has been disbanded under a reorganization by national security adviser John Bolton. The abrupt departure of Rear Adm. Timothy Ziemer from the National Security Council means no senior administration official is now focused solely on global health security. Ziemer’s departure, along with the breakup of his team, comes at a time when many experts say the country is already underprepared for the increasing risks of a pandemic or bioterrorism attack.’
Wow. What were the odds?”
Ziemer can sit at home, watch the evening news, and realize that a tribal chieftain in the jungles of Myanmar understands the stakes of epidemic disease better than does the President* of the United States, not to mention the gaggle of sycophantic idiots he has gathered around him. I don’t know if Ziemer feels vindicated by this, but he should.
Is this enough? Truly, is this enough for the country that looked at itself after eight years of a competent presidency and decided to hand things over to a vulgar talking yam? Are the vacant airports and deserted subways enough? Will the empty arenas and ballparks be enough? Is the plunging stock market enough? When the ambulances start hauling away the old folks down the block, will that be enough? How in god’s name can anyone vote for four more years of this, four more years of a choleric fatburg of a man who calls a press conference about a global health emergency and asks a reporter for Fox News how the ratings were for his last town hall? How does that man carry a precinct, let alone a state, let alone the country? Christ, even Ted Cruz is doing the right thing here.
Instead, we have scientists standing around him at the CDC, nodding in unison at the president*’s idiocies. We have the surgeon general on television, telling an astonished George Stephanopoulos that the president* is in better shape than he is, despite the obvious fact that the president* is entering Mr. Creosote territory. There are rising calls now for the declaration of a national emergency. Which raises a terrifying question: do you want this president* and this executive branch declaring a national emergency, with all the special powers that entails? Hand sanitizer and fist-bumps seem a lot safer.”
This is the unfettered capitalism, GOP game plan. Get the government out of people’s lives and let the markets handle it with their invisible hands. I certainly do not blame Trump for the emergence of a new virus, but I do blame him and his GOP enablers for a relatively ineffective and virtually opaque response by the federal government. As someone well over the age of 60 I take it very personally that he would rather bolster the aviation industry than let the CDC tell me that I should not get on an airplane for awhile. I also take issue with the idea that after telling Fox News he is going to cut Social Security and Medicare the first words out of his mouth on a plan to boost the economy is to significantly reduce payroll taxes. How about rescinding the corporate and high earner tax cuts and plowing the money raised into paid sick leave and free testing for COVID-19 or as the GOP puts it the “Chinese Coranavirus”. I also note that along with the stock market taking a hit because of the hit that profits will take the issuers of some $10 trillion in corporate debt are in trouble even with the extremely low interest rates and so are the banks, mutual funds, insurance companies and folks like me who have invested in them. I was still working in 2008 and could survive until the Dems brought the economy back, but it is going to be a lot harder this time.
let me try to clarify the timeline a bit, since i was up all hours watching it happen…”Putin”, in the person of Russian Energy Minister Novak, walked out of the OPEC meeting meeting without an agreement to cut production on Friday, precipitating a 10% drop in oil prices (click on my initials here & you’ll see i write about this stuff every week) …the Saudis, who had been pushing for a 1.5 million barrel per day agreement to cut production, threw a hissy-fit over the weekend and started a price war against the the Russians, marking down all the grades of oil they sell…as a result, oil futures were down 30% sunday and opened down nearly that much Monday morning….at $30 oil, US oil companies are bankrupt…problem is, the banks are holding massive amounts of their debt….so the Monday market crash was led by energy & the banking sector, and everything else went along for the ride…
The gang that couldn’t shoot straight. How many more Rep administrations will we have before figuring out they suck at government?
“And, in his first inaugural address, Ronald Reagan said this: “Government is not a solution to our problem, government is the problem.”
And everybody around me on the west front of the Capitol cheered. From The New York Times:
‘As luck would have it, Dr. Chu had a way to monitor the region. For months, as part of a research project into the flu, she and a team of researchers had been collecting nasal swabs from residents experiencing symptoms throughout the Puget Sound region. To repurpose the tests for monitoring the coronavirus, they would need the support of state and federal officials. But nearly everywhere Dr. Chu turned, officials repeatedly rejected the idea, interviews and emails show, even as weeks crawled by and outbreaks emerged in countries outside of China, where the infection began.
Federal and state officials said the flu study could not be repurposed because it did not have explicit permission from research subjects; the labs were also not certified for clinical work. While acknowledging the ethical questions, Dr. Chu and others argued there should be more flexibility in an emergency during which so many lives could be lost. On Monday night, state regulators told them to stop testing altogether. The failure to tap into the flu study, detailed here for the first time, was just one in a series of missed chances by the federal government to ensure more widespread testing during the early days of the outbreak, when containment would have been easier. Instead, local officials across the country were left to work in the dark as the crisis grew undetected and exponentially.’
There is no small-government solution to a crisis of this magnitude. You can’t “leave it to the states” because the states are completely incapable of handling it, and because some of the states—the ones, for example, that refused to expand Medicaid when the option was given to them under the Affordable Care Act—are public-health basket-cases in the best of times, which these certainly are not.
‘The case was a teenager, in the same county where the first coronavirus case had surfaced, who had a flu swab just a few days before but had no travel history and no link to any known case. The state laboratory, finally able to begin testing, confirmed the result the next morning. The teenager, who had recovered from his illness, was located and informed just after he entered his school building. He was sent home and the school was later closed as a precaution.
Later that day, the investigators and Seattle health officials gathered with representatives of the C.D.C. and the F.D.A. to discuss what happened. The message from the federal government was blunt. “What they said on that phone call very clearly was cease and desist to Helen Chu,” Dr. Lindquist remembered. “Stop testing.”’
Spend four decades building the case that the federal government is a hindrance to personal freedom and economic prosperity and, sooner or later, people will think anybody can run it and will elect themselves an entertaining moron to do so. Spend four decades building the case that the federal government can’t do anything right and, sooner or later, it will forget how.
Government, like a hammer, is a tool, as the late Molly Ivins used to say. Like any other tool, there is a right way and a wrong way to use it, and that depends on the competence of the person using it. You can use it to build a house or you can use it to break your thumb. Alas, now, in the middle of a global pandemic, we seem to be governed by people compelled to hit themselves over the head with it, time after time, until blissful unconsciousness reasserts itself and they don’t have to think about the rest of us for a while.”
a little more context to my point that Monday’s market drop was driven by the oil and banking sector..
her’e a few of the hits taken by oil companies: Chevron (-15.37%), Occidental (-52.01%), Apache (-53.86%), Marathon Oil (-46.81%), ExxonMobil (-12.22%), EOG Resources (-31.98%), ConocoPhillips (-24.87%), and Pioneer Natural Resource (-36.96%)
and by the big banks: Citigroup (-16.17%), Bank of America,(-14.70%), JP Morgan (-13.56%) Deutsche Bank (-12.78%), Goldman Sachs (-10.39%) and Morgan Stanley (-10.37)
even more notable was that one of hardest hits was taken by Continental Resources CEO Harold Hamm, a big Trump contributor and early energy adviser, who lost $2 billion on paper….he’s why Trump is scrambling to come up with a multi–billion package to bail out big oil, which he’ll probably attach to the coming coronavirus bill with worker sick pay and a payroll tax cut to try to get it through Congress…
Corona virus has proved to be a global scare right now. Hopefully the vaccine will be found from the volunteers of the U$ 4000
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