February 24, 2020
The stock market was down 3.12% when it opened on Monday.
Over the weekend there were major outbreaks of the coronavirus reported in South Korea, Italy and Iran.
The virus is spreading.
Six nations banned people crossing the border from Iran in an attempt to cut off the spread of the deadly virus.
There are at least 600 cases reported in South Korea.
With 165 people infected, Italy has the most coronavirus victims out of any country in Europe. Five people have died.
Footage out of Milan shot yesterday shows some products almost or entirely out of stock.
Some residents flippantly likened the situation to a “zombie apocalypse.”
Lock downs are in place in the regions of Lombardy and Veneto, with 50,000 people being unable to leave without special permission.
Numerous museums, cinemas, bars, businesses and schools have also shut down and sporting activities have been suspended.
The Venice Carnival was also cancelled, while designer Giorgio Armani streamed his Milan Fashion Week event from an empty theater.
The panic is largely being driven by the speed at which coronavirus cases in Italy jumped from just 3 on Thursday to over 150 by the end of the weekend.
Submitted by Michael Every of Rabobank
After all, following Vietnam, Iran now has eight deaths and an uncertain number of cases, prompting schools and universities to closed and the borders with Afghanistan and Pakistan to be sealed from the other side. For an economy already being crushed by sanctions, this is all that it needed. More worrying for markets, South Korea (with a GDP of over USD1 trillion) has also been swamped by hundreds of new cases, a 20-fold leap in just five days, and, as in China, is seeing the highest-level emergency declared, cities on lock-down, gatherings and travel bans in place, and the national assembly additionally suspended. Samsung has had to shutter at least one factory, in the city of Gumi. The Asian economy, already reeling, it about to suffer another major kick.
Worse, in Europe there also are over 160 cases in a cluster in northern Italy, with three deaths so far, and the regions of Lombardy and Veneto, the industrial and financial heartlands, in both panic and lockdown. Venice’s Carnival has been cancelled, and so was a recent fashion show. Italy is 11% of Eurozone GDP, and those two regions are 30% of Italy’s GDP. For a Eurozone already close to recession, that shock could well be more than enough to generate a downturn. Once again, we also see what we said we would in our recent virus special report: a “China-style” response: yesterday a train from Venice to Munich was stopped at the Austrian border because of fears that two passengers on board may have had the virus. So much for Schengen? Recall that the origins of the world “quarantine” come from Venice in an earlier phase of globalisation, and refer to the *40* days sailors had to stay on a visiting ship to prove they were not carrying an infectious disease. No just-in-time supply chains in those days though.
Meanwhile, China is saying the virus may not have started in the seafood market; hot-headed Chinese social media is saying it might have been America who started it; experts are saying COVID-19 can linger on surfaces for nine days, and is airborne, and can be passively carried with no symptoms for up to *27* days, nearly double the 14 days previously thought; and other reports show that false negative tests are a serious issue, with at least one confirmed case of a patient being tested negative twice and then switching to positive. As the WHO, which has urged us all to travel as normal until now, “because markets”, wails, the window to stop this becoming a global pandemic is closing.
By contrast, China is doing its best to say that all is well. Unsurprisingly, since Party Chairman Xi Jinping placed his hand-picked people in charge, new cases have dropped sharply. Optimists see this means the lockdowns have worked – which means more global lockdowns must now be priced in, however; pessimists suggest data goal-seeking is playing a role here. However, deaths have not fallen yet, with another 97 yesterday raising the overall fatality rate worryingly (and one study of 53 Wuhan patients suggests a 61.5% fatality rate for those with any co-morbidity factor such as diabetes and/or heart or lung disease).
Just as unsurprisingly, Xi has publicly promised China will have beaten the virus by the end of March, and that the overall economic goals for 2020 are still in place, even as right now we are still basically flat-lining as shown by traffic congestion, pollution, and property sales. As we have already covered in recent weeks, the only way for BAU to return ASAP is for everyone to start travelling and gathering and working again: which is exactly how the virus will spread, especially after we have been told there is a 27-day latent period, as well as a clear tendency of asymptomatic carriers, and even more so now it has legs outside China too. Even so, people are being urged back to work as eagerly as they were being told to lock themselves in at home just two weeks ago.
Equally unsurprisingly, the PBOC, who have already lowered rates 10bp, are making clear that COVID-19 “will be short-lived and will not change the country’s sound economic fundamentals”. With several reports suggesting up to 85% of China’s small business are going to run out of cash within three months, and many within weeks, its banks riddled with bad loans and already under-capitalised, and the state clearly about to embark on another massive debt-splurge to build more infrastructure to keep to a set GDP number regardless, even when China does re-emerge from COVID-19 it will be sagging under an even more unsustainable debt load, and the state will be playing an even larger economic role. It’s also unclear if foreign firms will be as willing to be embedded in a long, China-centric supply chain regardless, making USD inflows less likely; and all of those issues above will mean the weaker CNY we have referred to for years. It is no surprise we are through 7 again; the larger surprise is that we are not closer to 7.20.
More broadly, of course, the “Ugly” scenario is seeing US Treasury yields test critical support levels. The 10-year is now at 1.47% and another leg down will see us in whole new territory. Likewise, the USD is on a roll upwards and threatening to push higher: imagine if European virus cases spread, the same happens in Japan, and China cannot reopen as planned. And imagine what a stronger USD on top of this virus backdrop will mean for emerging-market USD borrowers. Ugly indeed.
Such is the news-flow that I hardly have time to relate that Bernie Sanders handily won the Nevada Democratic caucus, leaving Joe “White Walker” Biden in a poor second place and Mike Bloomberg looking as user-friendly as his terminals are. That makes Bernie the clear presidential nominee front-runner at this stage – and makes many Never-Trumpers into Rather-Trumpers, I would imagine. And imagine if Bernie’s plans for free healthcare for all intersect with a virus outbreak in the US….(on which note, please see our recent Through The Looking Glass report imagining a Sanders presidency).
By Dr. John Campbell – 2/24/2020
FEBRUARY 21, 2020
The country now has the second highest number of infected people after China.
The country also confirmed its first death from coronavirus on Thursday.
The Korean Centers for Disease Control and Prevention said that of the new cases, 39 were from the southern city of Daegu. All of these cases were linked to the Shincheonji Church of Jesus in the city.
The infections have been traced to a 61-year-old woman, who attended the church. The sect has since shut down its services. The mayor of Daegu, Kwon Young-jin has advised residents to stay indoors as much as possible.
Prime Minister Chung Sye-kyun said that Daegu and the neighboring area of Cheongdo County would be declared as “special care zones.”
The government is trying to identify those who might have come in contact with infected people, and diagnose the disease at the earliest opportunity.
“We will proactively provide necessary assistance including sickbeds, personnel, and equipment,” the PM said in a meeting with senior officials.
Also on Friday, officials in the capital Seoul banned public rallies in a bid to control the spread of the disease.
The coronavirus outbreak that originated in China has infected more than 76,000 globally. It was named COVID-19 by the World Health Organization due the coronavirus that causes it, and the year 2019 when it originated.
JANUARY 29, 2020
Just hours after the UK Foreign Office warned Britons against traveling to China, British Airways, Britain’s flag carrier, and its second-largest airline in the UK, suspended all flights to China.
British Airways operates direct flights from Heathrow to Beijing and Shanghai, but right now, passengers can’t book flights on those lines until Feb. 29. CNN called it “the most drastic action yet by a major airline” in response to the crisis.
The decision comes after United Airlines said it would temporarily reduce the number of flights between the US and China.
“We have suspended all flights to and from mainland China with immediate effect following advice from the Foreign Office against all but essential travel,” the company said in a statement Wednesday.
This comes after United said Tuesday that it had seen a “significant decline in demand” and been forced it to suspend flights from Feb. 1 through Feb. 8 between its US hubs and Beijing, Hong Kong and Shanghai. In total, 24 round trips have been impacted between Hong Kong to San Francisco and Newark; Beijing to Dulles, O’Hare and Newark; and Shanghai to San Francisco, Newark and O’Hare.
American Airlines, Delta and United all extended change fee waivers through the end of February, while Hong Kong flagship carrier Cathay Pacific said it will reduce the capacity of flights to and from mainland China by half or more until the end of March.
Finland’s Finnair is canceling three weekly flights between Helsinki and Beijing between Feb. 5 and March 29, and two weekly flights between Helsinki and Nanjing between Feb. 8 and March 29, because of the suspension of group travel by Chinese authorities. It will continue to operate flights to Beijing, Shanghai, Hong Kong and Guangzhou.
There are now 5,974 cases in China, with 1,239 of whom are severely ill, according to state media on Wednesday. Initial theories, put forward by some infectious disease experts, that the mortality rate of the virus is much lower than reflected in press reports because thousands with mild cases are likely toughing it out in their homes. If anything, it looks like the virus is more lethal than we previously believed.
And it’s certainly more infectious.
Per the SCMP, a 48-hour span of no new nCoV infections came to an end Wednesday when Hong Kong authorities announced two more patients tested positive for the potentially deadly illness, bringing the local total to 10, as the HK government suspends high-speed rail travel between the Special Administrative Region and the mainland. The HK Department of Health said the two new patients, an elderly couple, aged 72 and 73, tested positive at Queen Mary Hospital in Pok Fu Lam, and, because of their age, fall into the high-risk category of infections. More than 100 people are still in isolation in HK.
The situation is growing increasingly worrisome in Guangdong province, which is centered around the city of Guangzhou, the fifth-largest in China.
Guangzhou is at the center of a massive conurbation stretching out all the way to Shenzen, and to the other neighboring cities of Foshan, Dongguan, Zhongshan and several other neighboring provinces. This agglomeration is one of the largest of its kind on Earth, home to more than 100 million. City officials announced five new infections, two locals and three foreigners. With more than 270 confirmed cases, this well-connected and economically important province is behind only Hubei and Zhejiang in terms of number of cases.
Now that several countries have copies of the coronavirus genome, the race for a workable vaccine is intensifying. Russia joined that race on Wednesday after receiving a copy of the virus genome from China, Russian state media reported on Wednesday. The US said on Tuesday that it would take three months to start initial trials for a vaccine that it’s developing, and three further months to gather data.
In Hong Kong, infectious diseases expert Professor Yuen Kwok-yung said on Tuesday that the city’s researchers had stumbled on a vaccine, but that it would take months to test on animals and at least another year to conduct trials on humans before it could be confirmed ready for human use. Scientists in Melbourne said they grew the virus from a patient sample, which could prove a “game-changer” in combating the outbreak. It was the first time the virus had been grown in a cell culture outside China (here’s hoping it isn’t misused as a potential bioweapon).
After confirming the first case of human-to-human transmission in Japan, health officials in Tokyo have shared more information about the case with the press: The man did not travel to Wuhan but drove buses with tour groups from the city twice this month. The man is in his 60s and lives in Nara Prefecture, according to the Japan Times.
Overnight, the first case of the virus in the Middle East have been confirmed in the United Arab Emirates, according to the country’s Ministry of Health and Community Protection. The 4 infected patients are members of a family that had traveled from Wuhan. In its statement, the health ministry reported the family as being in a stable condition under medical observation, according to CNBC.
As hysteria surrounding the outbreak grows, SCMP reports that resentment toward people from Wuhan is growing across China, as provincial authorities ramp up screenings of those from Wuhan, and citizens build unauthorized roadblocks to keep strangers out of their towns.
Meanwhile, President Xi said Wednesday that “preventing and containing the virus remains a severe and complex task,” a follow up to his claims that China would do whatever is necessary to contain the “demon” virus.
1/28/2020
Video of Bolton reportedly walking on a sidewalk in Doha, Qatar was posted to Twitter earlier this month.
Whether Bolton was in Qatar to take advantage of lobbying opportunities or if he was up to something more questionable remains a mystery.
One Twitter user noted Bolton was likely walking down Qatar’s government district, suggesting he may have been peddling his influence there.
The video must have been taken after Bolton was fired as National Security Advisor, because he would likely not have been wearing plain clothes otherwise and would likely be accompanied by a security detail.
Politico reporter Daniel Lippman reported that Bolton was in Qatar on “personal business.”
Bolton is currently being hailed as the left’s new hero after the New York Times reported Monday that Bolton has concerns about President Trump and Ukraine detailed in his upcoming memoir, “The Room Where It Happened.”
By Dan Lyman
A total of 39 migrants, all identifying themselves as Iranian nationals, were apprehended by authorities with U.K. Border Force and Kent Police.
“The first boat, which was stopped by the Border Force at 4.40am, contained nine people with the second incident happening at 6am – with five more people being detained in a rigid hulled inflatable boat (Rhib),” the Evening Standard reports.
Another two vessels carrying 11 and 14 migrants, respectively, were located and stopped at 7 am and 7:30 am.
“Border Force dealt with four incidents on November 17 after being alerted to small boats travelling across the Channel towards the U.K.,” a government spokeswoman said in a statement.
“The people from all boats were taken to Dover where they were medically assessed before being interviewed by immigration officials.”
The number of migrants crossing the English Channel has been steadily rising, with over 1,500 successfully completing the journey so far in 2019, a 500% increase from 2018.
In September, U.K. authorities intercepted 86 migrants illegally crossing the English Channel during a record-setting day.
British authorities revealed that migrants have become so emboldened by the lack of disciplinary action being taken against illegal crossers, some are simply calling police from their boats to arrange pick-up.
“Illegal migrants are ringing police to collect them from boats in the Channel because they are so sure of avoiding being returned to their countries, MPs have been told,” the London Times reported in February.
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