Coronavirus pandemic could wipe $1.1 TRILLION off global economy — Oxford Economics

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China’s GDP growth is expected to fall from six percent last year to 5.4 percent in 2020 due to the spread of the COVID-19 virus, said the latest report by Oxford Economics.

It has modeled two scenarios on the coronavirus outbreak morphing into pandemic. Under the first scenario, if it spreads more widely in Asia, world GDP would fall by $400 billion this year, or 0.5 percent. The second scenario foresees the global GDP dropping $1.1 trillion or 1.3 percent, if the virus outbreak becomes a pandemic and a disruption to manufacturing in Asia spreads worldwide. Such a decline would be the same as losing the entire annual output of Indonesia, which is the world’s 16th largest economy.

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“Our scenarios see world GDP hit as a result of declines in discretionary consumption and travel and tourism, with some knock-on financial market effects and weaker investment,” wrote the analysts.

Oxford Economics said it still expected the impact of the virus to be limited to China and to have a significant, but short-term impact, bringing world GDP growth just 0.2 percent lower than January at 2.3 percent.

The growth of new confirmed cases of the deadly coronavirus has slowed down this week, but experts warn it is too early to call the all-clear for the risk of a pandemic. So far, there are over 75,500 confirmed cases and more than 2,100 deaths.

Shocking Spike In COVID-19 Cases Puts Beijing On High Alert; Officials Weigh “Wuhan-Level” Lockdown

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Summary:

  • Iran confirms 5 cases of COVID-19

  • Japanese officials defend their handling of ‘Diamond Princess’ quarantine

  • Beijing tightens lockdown after dozens more cases reported

  • As outbreak ex-China accelerates, WHO warns case #s “won’t stay low for long.”

  • Hong Kongers evacuated from ‘Diamond Princess’ after Japanese government confirms 2 deaths

  • Researchers confirm COVID-19 more contagious than SARS and MERS

  • Tim Cook welcomes back employees, customers as Apple reopens some China stores

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Update (1420ET): WSJ reports that Japan’s top health officials have defended their handling of the ‘Diamond Princess’ quarantine during a statement to Japan’s parliament, the Diet.

Japan’s Health Minister Katsunobu Kato told Parliament the two people from the Diamond Princess cruise ship who died had “received the best medical treatment” but couldn’t be saved after catching the novel coronavirus on board. As of Thursday, 634 passengers and crew members were diagnosed with the virus out of 3,063 tested. Slightly more than half have no symptoms at all, officials said, and many of the remainder have only mild fever or a cough. Among patients who tested positive for the virus, 28 were reported in serious condition Thursday.

Doctors have said the virus can be particularly harmful in elderly patients, and one of the two fatal cases from the Diamond Princess, a Japanese man in his 80s, had pre-existing bronchial asthma and had been treated for angina. The other, a Japanese woman in her 80s without underlying illnesses, came down with a fever on Feb. 5, the same day passengers were told they would be quarantined in their cabins for two weeks, according to health ministry officials. The next day, she started suffering from diarrhea and saw a doctor on board.

She wasn’t taken to a hospital until Feb. 12 when she started suffering shortness of breath. Her virus test came back positive the following day, and despite treatment with antiviral drugs normally used to treat HIV infection, she died Thursday.

Asked about the woman’s case, health ministry official Hiroshi Umeda said, “I believe it was handled promptly.” He said the ship was a difficult environment for medical staff but they worked day and night and tried to prioritize the most serious cases.

The country has been widely criticized for appearing to break quarantine on the cruise ship, which was home to the largest COVID-19 outbreak outside China. More than 700 passengers who tested negative for the virus disembarked the ship on Wednesday and Thursday.

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Update (1415ET): A group of 59 Hong Kong police officers has been quarantined after a fellow officer tested positive for the virus, according to a statement released publicly by the city’s police.

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Update (1250ET): Less than an hour ago, we mentioned that Beijing’s heavy-handed virus-fighting measures had become the subject of an intense “public debate” about whether they were doing more harm than good.

Well, according to an unconfirmed report from the Epoch Times’ Jennifer Zeng, party officials in Beijing are upgrading its “epidemic prevention” status to “Wuhan-level” – meaning a complete lockdown where residents aren’t allowed to leave their homes without specific permission.

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Another tweet sent earlier in the day reported new restrictions being imposed at a Beijing apartment complex.

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How much longer can the party keep this up before it damages public confidence to a degree that can’t be repaired.

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Update (1200ET): In what appears to be yet another consequence of Beijing’s rushed push to get all of China “back to work” nearly two weeks ago, the Global Times, a Chinese tabloid that also publishes in English.

A hospital in Central Beijing has reported 36 novel coronavirus cases as of Thursday, a sharp increase in the number of cases reported in the capital city. The new cases bring Beijing’s total to 45, stoking fears that the outbreak could accelerate.

Among the infected at Fuxing Hospital in Beijing’s Xicheng district were eight medical workers, nine cleaning staff and 19 patients, along with members of their families.

These confirmations follow reports that Beijing officials quarantined whole office buildings following after some employees were suspected of having the virus.

“Considering 36 confirmed cases were found in Fuxing Hospital, it is more about one case of multiple infections rather than an epidemic of the whole area,” Wang Guangfa, director of the department of respiratory and critical care medicine at Peking University First Hospital, told the Global Times on Thursday.

“This coronavirus issue is big. It will effect a lot of companies, and I think the market’s have underestimated what a big supply-side shock this is,” said Mohammad El-Erian, Bill Gross’s former No. 2 man at PIMCO and a widely watched economist who works now with PIMCO parent Allianz.

Peking University People’s Hospital, another major hospital in Beijing, confirmed that it had received three patients carrying the virus earlier this week on Feb. 17. Already, a total of 164 medical workers at the hospital have been placed under close medical observation after they had “close contact” with the patients – something that seems almost unavoidable for nurses and doctors.

A total of 164 people including medical staff at People’s Hospital who have had close contact with the patients have been put under close The hospital said it had conducted coronavirus tests on 251 personnel, and so far, they’ve all been negative.

In other news, another analyst has told the GT that Apple’s iPhone sales in China will shrink 40% to 50% in the near term after the company closed all its retail stores in the country earlier this month. Those stores have only just started to reopen.

Liang Zhenpeng, a senior industry expert, told the Global Times on Thursday the COVID-19 outbreak has dealt a heavy blow to the sales of all mobile phone suppliers in China, including Apple.

“The iPhone’s sales in the first quarter of this year are likely to be less than half of the same quarter in 2019,” he said. “Mobile phone sales, both online or offline, are very difficult during this period, because the supply chains can hardly be normalized.”

Apple CEO Tim Cook said on his Sina Weibo account, China’s Twitter-like social media, that the company is welcoming back employees and customers and is looking to work closely with their manufacturing partners to get everything back on track.

We suspect this is what triggered the market plunge over the last 30 minutes.

Circling back to Beijing, the municipal officials said that all hospitals in Beijing should “accelerate hospitalization of patients and try their best to diagnose suspected cases to treat the infected patients at the earliest time.”

So far, the confirmed cases in the city have been scattered around 15 of its 16 districts.

The hysteria surrounding the outbreak across China has actually sparked an interesting public debate – something you don’t see much in China – about whether all of the heavy-handed government measures – the quarantines and lockdowns and roadblocks – and the work stoppages are really necessary.

Some even contend that by impoverishing regular Chinese people via work stoppages that damage the economy, the government might be doing more harm to the population than the virus has, according to the New York Times.

With hundreds of millions of people in China now essentially living in isolation and its economy nearly at a standstill, experts in the country are increasingly arguing that Beijing’s efforts to fight the coronavirus are hurting people’s lives and livelihoods while doing little to the stop the virus’s spread.

If the country becomes poorer because of emergency health measures, they say, that drop might hurt public health more than the virus itself.

The debate – including questions about whether mandatory 14-day quarantines, roadblocks and checkpoints are really necessary in areas where there have been few cases – is unusual in a country where dissent is usually censored.

It comes as China reported a significant decrease in new coronavirus infections on Thursday, as health officials changed the way they counted confirmed cases for the second time in over a week.

Of course, President Xi and China’s senior economic officials claim that there won’t be any economic pullback, since Beijing is obviously winning the ‘People’s War’.

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Update (1010ET): Talk about a spike in deaths: Iran is now reporting 9 deaths after shocking the world by revealing that two Chinese nationals infected with the virus had died in the city of Qoms earlier this week.

The Iranian regime has reportedly imposed a China-style crackdown on Qoms, deploying military and crowd-control police across the city.

It’s just the latest sign that the cases and deaths ex-China are accelerating.

CNBC’s Eunice Yoon reports that Beijing has warned Hubei not to allow people back to work before March 10.

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Local leaders said yesterday that they would launch a special financing vehicle to help struggling companies in the province survive the outbreak.

Following the WHO’s daily press conference, Director General Dr. Tedros said the WHO had confirmed 1,000 cases outside mainland China (with more than half of them infected aboard the ‘Diamond Princess’), and 7 deaths, likely excludes some of the deaths announced over the past 12 hours. Though he added that the data coming out of China “appeared to show a decline in new cases.”

“Outside China, we have seen a steady drip of new cases, but we have not yet seen sustained local transmission, except in specific circumstances like the Diamond Princess cruise ship,” he added.

More ominously, Dr. Tedros exclaimed that the outbreak is far from over, and if governments don’t take adequate steps to fight the virus, the number of cases outside China “won’t stay low for very long.”

Worried about more shortages of personal protective equipment like facemasks, Dr. Tedros pleaded with a dozen different manufacturers to do whatever they can to keep up appropriate global supplies.

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The director said the WHO expects to have more data from two clinical trials for treatments in roughly 3 weeks.

Since we haven’t posted a breakdown of new cases yet today, we figured we’d share this list of countries, cases and deaths courtesy of the Associated Press:

According to the Associated Press, the latest figures provided by each government’s health authority as of Thursday in Beijing are:

  • Mainland China: 2,118 deaths among 74,576 cases, mostly in the central province of Hubei

  • Hong Kong: 65 cases, 2 deaths

  • Macao: 10

  • Japan: 727 cases, including 634 from a cruise ship docked in Yokohama, 3 deaths

  • Singapore: 84

  • South Korea: 51, 1 death

  • Thailand: 35

  • Taiwan: 24 cases, 1 death

  • Malaysia: 22

  • Vietnam: 16

  • Germany: 16

  • United States: 15 cases; separately, 1 U.S. citizen died in China

  • Australia: 14

  • France: 12 cases, 1 death

  • United Kingdom: 9

  • United Arab Emirates: 9

  • Canada: 8

  • Iran: 5 cases, 2 deaths

  • Philippines: 3 cases, 1 death

  • India: 3

  • Italy: 3

  • Russia: 2

  • Spain: 2

  • Belgium: 1

  • Nepal: 1

  • Sri Lanka: 1

  • Sweden: 1

  • Cambodia: 1

  • Finland: 1

  • Egypt: 1

In other news, UK passengers aboard the ‘Diamond Princess’ will be evacuated by their government on Friday. The chartered evacuation flights (following the standard template) will land at Boscombe Down airbase in Wiltshire. Elsewhere in the anglosphere, Australia has extended its travel ban for arrivals from China into a fourth week. It will last until Feb. 29, the Guardian reported.

* * *

Hours after Japanese press reports claimed that two passengers who contracted COVID-19 aboard the ‘Diamond Princess’ died yesterday – news that was later confirmed by Japanese authorities – South Korea reported its first fatality while one of its major cities asked citizens to stay inside and avoid venturing outdoors, according to the Washington Post.

According to Japanese government officials, both of the virus-related fatalities were Japanese citizens in their 80s who had been moved off the ship more than a week ago for treatment in a Japanese hospital, though the government has so far declined to release names.

The latest reports Thursday morning confirmed another 13 cases aboard the DP bringing the total to 634. The odds that individuals being released from the 2 week quarantine on Thursday and Friday might have contracted the virus, but have yet to show symptoms, remains high. The death in South Korea raised the death toll ex-China to 10.

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The speed is hardly a surprise for those who have been paying attention to all of the new research, instead of dismissing it for being ‘alarmist’ and ‘not peer reviewed’.

Finally, earlier this week, researchers published the largest study yet of the outbreak, which confirmed that COVID-19 is more contagious than SARS and MERS, leaving it on par with seasonal influenza.

Still, experts insist that the virus’s fatality rate is probably around 2%, meaning that it’s less deadly than SARS, but the wider spread will result in more deaths, CNN reports.

“My sense and the sense of many of my colleagues, is that the ultimate case fatality rate … is less than 2%,” Dr. Anthony Fauci, director of the National Institute for Allergy and Infectious Diseases, told CNN’s Jim Sciutto on “New Day” Tuesday. “What is likely not getting counted is a large number of people who are either asymptomatic or minimally symptomatic, so the denominator of your equation is likely much much larger.”

“So I would think at tops it’s 2% and it likely will go down when all the counting gets done to 1% or less. That’s still considerable if you look at the possibility that you’re dealing with a global pandemic,” he added.

Even as President Xi does everything in his power to present an image of success to the Chinese people – in his speeches, he claims the Chinese government’s strict quarantines have been an unmitigated success – global experts, including the WHO, have warned that the disease will continue to spread globally, and that the end of this crisis is still far from certain.

And as new confirmed cases dropped substantially on Wednesday in Hubei, everywhere else, the rate of new infections is accelerating.

In South Korea, the number of cases soared by almost two-thirds to 104 overnight, further emphasizing our observation that the number of cases ex-China has started to accelerate notably as the curve starts to resemble an exponential progression.

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One WHO health expert told a Japanese TV station on Thursday that the virus is “a moving target” making it difficult to collect information and treat people: “Nobody has ever had to deal with this situation before, this is a new virus on a ship with 4,000 people, there are no guidelines for that.” He added that he suspects there was a substantial amount of transmission before it arrived in Yokohama, adding that it was “not possible” to isolate everybody individually.

The WHO senior epidemiologist was responding to claims made by another expert in infectious disease that the Japanese had failed to observer proper quarantine protocols.

Back in Korea, the mayor of Daegu, a city of 2.5 million where 10 South Koreans contracted the disease from a church service, asked residents to stay indoors. Iran also reported two infected that then died.

Experts suspect that one woman in Daegu may have infected at least 40 others by going to her Christian church, according to Yonhap. The alleged ‘superspreader’ is the reason for the huge jump in new cases on Thursday. Experts say the city is now facing an “unprecedented crisis” following the spike in cases.

“We are in an unprecedented crisis,” Daegu’s mayor, Kwon Young-jin, told the press.

Cases are also surging in Singapore, where Deutsche Bank confirmed that an employee in its Singapore office had contracted the virus.

Adding to its woes, Iran reported three new cases on Thursday a day after it confirmed two virus-related deaths in the city of Qoms.

Warnings about the virus’s economic blowback are increasing, as Goldman said Thursday that stocks aren’t completely pricing in the risks from the virus.

Meanwhile, Air France-KLM, Qantas, and the global container shipping giant Maersk became the latest companies to warn about the financial impact from the continued spread of the coronavirus.

As President Xi balances the risks to tens of thousands of lives on one hand, and keeping his promise to double the size of China’s economy by 2020 on the other, it seems the leadership in Beijing are beginning to believe their own propaganda. Premier Li Keqiang, Xi’s No. 2 who is in charge of the committee managing the crisis, local governments should seek to increase the rate of resumed production and work, according to China Central Television.

Put another way: Come on in, the water’s fine, and if you get the virus and die, we’ll cremate your body and tell your family you died of “pneumonia.”

China’s smartphone shipment declined 50%-60% during the 2020 Spring Festival holidays due to the coronavirus outbreak. About 60 million smartphones remain unsold.

Chinese officials are pulling out all the fiscal and monetary stops to protect China’s damaged economy, and on Thursday local officials from Hubei announced a new lending scheme – a “special financing vehicle” – worth 50 billion yuan (more than $7 billion) to stabilize financing for local companies.

To be sure, the drop in new cases last night was largely caused by health officials reversing their decision to include “clinically diagnosed” patients – i.e. those who haven’t yet tested positive due to a shortage of effective tests – in the case totals.

The spate of deaths rattled investors overnight, and US equity futures are pointing to a lower open on Thursday, and a rush of risk-off trading in Asia has pushed the BBG dollar index to a 4-month high following the latest piece of evidence that the coronavirus isn’t simply “another flu”.

China Has Ground To A Halt: “On The Ground” Indicators Confirm Worst-Case Scenario

by Tyler Durden

Back on Monday, when analysts and investors were desperately seeking clues whether China has managed to reboot its economy from the 2-week long hiatus following the Lunar New Year/Coronavirus pandemic amid the information blackout unleashed by the communist party in the already opaque country, we pointed out some alternative ways to keep tabs of what is really taking place “on the ground” in China, where Xi Jinping has been urging local businesses and workers to reopen and resume output, while ignoring the risk the viral pandemic poses to them (with potentially catastrophic consequences).

Specifically, Morgan Stanley suggested that real time measurements of Chinese pollution levels would provide a “quick and dirty” (no pun intended) way of observing if any of China’s major metropolises had returned back to normal. What it found was that among some of the top Chinese cities including Guangzhou, Shanghai and Chengdu, a clear pattern was evident – air pollution was only 20-50% of the historical average. As Morgan Stanley concluded, “This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.”

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As a reminder, all this is (or technically, isn’t) taking place as President Xi Jinping on Wednesday sought to send a message that progress had been made in bringing the coronavirus outbreak under control and, for most parts of the country, the focus should be on getting back to business.

According to state television, Xi chaired a meeting of the Politburo Standing Committee, China’s supreme political body, on the latest developments on the crisis and future policy responses, concluding that there had been “positive changes” with “positive results”.

Xi also reiterated that all levels of local government and Communist Party committees must strive to achieve China’s social and development goals this year, indicating that he did not want the public health crisis to hinder progress.

Most importantly, Xi urged local authorities to refrain from taking excessive measures to curb contagion, and yet clip after clip from China…

… shows that the measures being taken are far beyond merely “excessive” when it comes to limiting the potential spread of the virus, which probably makes sense considering the unexpected surge in infected cases in Wuhan, which have sent the total for China just shy of 60,000.

Add to this the ongoing uncertainty that Beijing is far behind the curve in containing the virus, and one can see why most businesses are reluctant to “get back to normal.”

In the latest confirmation of just that, several other indicators have emerged showing that despite Xi’s stark demands for 1.4 billion Chinese to ignore the global pandemic which may very well have been started by one of China’s own experimental labs…

… virtually all of China – and all those critical supply chains that keep companies across the globe humming and stocked with critical inventory – remain on lockdown.

As confirmation, while we wait for an update from Morgan Stanley on the latest Chinese pollution data (at least until Beijing’s definition of “pollution” is also revised) here is JPMorgan showing that while traditionally daily coal consumption – the primary commodity used to keep China electrified – rebounds in the days following the Lunar New Year collapse when China hibernates for one week, this year there hasn’t been even a modest uptick higher, indicating that so far there hasn’t been even a modest uptick in output.

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Yet electricity is just one core indicator of real-time economic activity. Perhaps an even more critical one is human transit across the 1.4 billion person strong nation. Conveniently there is a way to track rudimentary traffic patterns across some of China’s key metro areas, and they show that – in a confirmation of the worst-case scenario – activity, as measured by travel, across most of China appears to have ground to a halt.

The charts below show TomTom’s traffic congestion data across key Chinese cities such as Beijing, Shanghai and Wuhan as compared to the average measurement for 2019. What they show is that virtually nobody appears to be driving in China!

Here is Beijing’s congestion level over the past 48 hours (a 7 day average is also available) compared to 2019. The data indicates that travel is about 70% below its 2019 peak.

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Amazingly, the industrial hub of Guanghzhou also appears to have ground to a crawl:

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By comparison, here is what Los Angeles traffic looks like over the past 48 hours vs 2019 average.

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While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporize faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.

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CDC Admits Coronavirus Patient Accidentally Released Because Of “Lab Mix-Up”; Bullard Says Virus Still “Tail Risk” For Markets

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by Tyler Durden

Summary:

  • Two inmates at a UK prison are being tested for coronavirus and have been restricted to their cells
  • 13th case diagnosed in San Diego was evacuee rescued from Wuhan, she was briefly accidentally released
  • China death toll tops 1,000, globally cases top 40k
  • CNBC’s Eunice Yoon reports on China’s sluggish ‘return to work’
  • Hong Kong building residents quarantined over fears virus spread via pipes
  • Cruise ship with 0 nCoV cases refused entry to fourth port, in danger of running out of food
  • Beijing fires top health officials in Hubei, summons others to Beijing for an explanation
  • Scientists in Hong Kong and the mainland present vastly different takes on virus
  • 2 Japanese men test positive but were accidentally released
  • President Xi says China will be ‘more prosperous’ after outbreak
  • Experts suspicious about how Indonesia hasn’t reported any nCoV cases
  • Xi also reportedly warned top officials that efforts to contain the virus had gone ‘too far’
  • CDC admits lab “mix up” led to coronavirus patient being briefly released back to quarantine
  • Another citizen journalist goes missing in China
  • Hilton warns travel numbers could be impacted for up to a year after Under Armor saw shares plunge on sales warning
  • Bullard warns virus still major “tail risk” for US economy and markets

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Update (1415ET): For everybody buying on Tuesday, uber-dove Jim Bullard, the president of the St. Louis Fed, has some advice: until the coronavirus pandemic has been completely contained, it will continue to pose a tail risk to the market.

Bullard, who spoke Tuesday following Congressional testimony by Fed Chairman Jay Powell, added that the three rate cuts last year will cushion the economy, but even that might not be enough to offset all of the economic uncertainty that markets are facing this year, from the virus to the presidential race.

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This after Powell – who was attacked by President Trump in the middle of his testimony via another Fed-bashing tweet calling for lower rates and a weaker dollar -said that the US economy “looks resilient” despite the coronavirus risk.

But Bullard apparently maintains a somewhat more cautious view:

“The efforts to bring the virus under control are substantial enough that the Chinese economy is expected to grow noticeably slower in the first quarter of 2020 than it otherwise would have,” Mr. Bullard said. “Experience with previous viral outbreaks suggests that the effects on U.S. interest rates can be tangible and last until the outbreak is clearly contained,” he said.

As futures markets price in at least one rate cut in 2020, Bullard said monetary policy “feels a bit too accommodative.” That’s saying something coming from one of the more dovish Fed presidents, though Bullard won’t be a FOMC voter again until 2022, assuming he’s still the president of the St. Louis Fed at that time.

The easing has shifted the outlook for short-term US rates considerably, he added.

“The efforts to bring the virus under control are substantial enough that the Chinese economy is expected to grow noticeably slower in the first quarter of 2020 than it otherwise would have,” Bullard said. “Experience with previous viral outbreaks suggests that the effects on U.S. interest rates can be tangible and last until the outbreak is clearly contained.”

But ultimately, we will need to “wait and see” whether the coronavirus truly becomes the catalyst of a global slowdown, like many analysts fear. Barring that, “the current baseline outlook for 2020 suggests a reasonable chance that a soft landing will be achieved,” Bullard said.

The St. Louis Fed twitter account shared this report that seems to expand upon the theme that monetary policy is much looser than the market realizes.

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Update (1330ET): Beijing has reportedly arrested another citizen journalist named Fang Bin. His arrest follows that of Chen Quishi, whose whereabouts are still unknown days after his disappearance.

Hilton is one of the latest American companies to warn about how the coronavirus outbreak will impact its business. The company said it could suppress travel numbers for up to a year, with their predictions based on what happened during the SARS epidemic. Facebook and Cisco have joined Sony and several other firms in pulling out of the Mobile World Congress, which was scheduled for Barcelona, Spain, a place the virus hasn’t yet touched.

This all comes after Under Armor warned about a $60 million sales hit, sending its stock tumbling lower. And it’s only the latest retailer to warn about the virus’s squeeze on sales.

In one of the more shocking revelations on Tuesday, the CDC said a “lab mix-up” is what led to them nearly releasing an infected patient back into mandatory quarantine on a nearby military base.

On the other hand, several carmakers including Hyundai and Ford confirmed that they had reopened at least some plants on Monday after idling them for all of last week.

Dr. Anne Schuchat, a top official at the CDC, told reporters in Washington, admitted that “it turns out there was probably a mix up and the original test wasn’t negative.” Earlier, state officials claimed the initial test was negative, but a second test was positive.

As we noted earlier, four evacuees at Marine Corps Air Station Miramar in San Diego had been in federal quarantine after showing symptoms of the virus. After testing negative for the virus, they were returned to the base on Sunday where they joined more than 200 people who are stuck there under a 14-day quarantine order. The patient who tested positive was immediately returned to isolation, according to CNBC. 

Google trends shows that interest in the virus remains elevated, though it has fallen from a peak reached on Jan. 31.

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Finally, the WHO gave the virus a new name: Covid-19.

* * *

Update (1035ET): Two inmates at HMP Bullinton prison in Oxfordshire, UK are being tested for coronavirus, according to Sky News.

The men are being kept in isolation in their cells, while access has been restricted to the wing where the prisoners are. HMP Bullington has capacity for 1,114 inmates, and holds both prisoners on remand and who have been sentenced, along with young adults aged 18-21, according to Sky.

Eight people in the UK have been confirmed as having coronavirus – four of them testing positive on Monday.

* * *

Update (0900ET): The Guardian reports that the diagnosis of four people living in a single apartment block in Hong Kong that has been evacuated and some of its residents quarantined has prompted worried comparisons to SARS.

Medical workers descended on the apartment block in Tsing Yi district wearing full protective suits and evacuated 100 people in 34 apartments after cases were identified more than 10 floors apart, suggesting that the virus may have traveled through the pipes.

One 62-year-old woman was among the victims, and she apparently passed it to her son and daughter-in-law who live with her and were among seven new cases reported on Tuesday, raising the city’s total to 49, leaving it in third place overall, behind mainland China and the ‘Diamond Princess’, which is under quarantine in Yokohama. The worsening outbreak a high profile incident of an individual believed to have tried to escape quarantine prompted Carrie Lam to threaten affixing GPS tracking devices to anyone in an HK quarantine.

Johns Hopkins

Plumbing was a problem during the SARS outbreak as well, as there were incidents where the virus traveled through the pipes.

Meanwhile, the Westerdam luxury liner still hasn’t found anywhere to dock after Thailand refused it entry earlier on Tuesday, which we noted below.

In other China news, the Communist Party Boss of Huangguang, a city that has been badly impacted by the outbreak, warned taht the crisis in his city is still “Very severe.” We suspect he will be scapegoated by this time tomorrow. After appearing in public yesterday for the first time since the outbreak kicked into high gear, President Xi said Tuesday that China will be “more prosperous” after the outbreak (despite its economy-crushing blowback). It’s the latest sign that Beijing is growing desperate to convince the public that China’s slowing economy can weather the outbreak without a severe downturn.

It begs the question: Will Xi add the capitalist concept of ‘creative destruction’ to his ‘Xi Jinping Thought’?

Meanwhile, Reuters reported on Tuesday that Xi warned top party officials last week that the country’s efforts to contain the outbreak – including quarantining 400 million+ people inside their homes and locking down whole cities – had gone too far. Xi fretted that the lockdown would threaten China’s fragile economy. Protecting and nurturing economic growth is Xi’s No. 1 priority in office and the bedrock of his ‘mandate’ to govern.

It’s unclear where Reuters got its information, but it claimed Xi made the remark during a Feb. 3 Politburo Standing Committee meeting that has already been covered by media reports (hand-picked comments were passed to state press). It just shows how much Cina’s tepid growth last year, the weakest in nearly 30 years, has been weighing on the president’s mind.

After reviewing reports on the outbreak from the National Development and Reform Commission (NDRC) and other economic departments, Xi told local officials during a Feb 3 meeting of the Politburo’s Standing Committee that some of the actions taken to contain the virus are harming the economy, said two people familiar with the meeting, who declined to be named because of the sensitivity of the matter.

He urged them to refrain from “more restrictive measures”, the two people said.

Local authorities outside Wuhan – where the virus is thought to have first taken hold – have shut down schools and factories, sealed off roads and railways, banned public events and even locked down residential compounds. Xi said some of those steps have not been practical and have sown fear among the public, they said.

China’s state council information office did not immediately respond to requests for comment.

In an incident that mirrors the circumstances of the 13th virus case diagnosed in the US by health officials in San Diego, Bloomberg reports that two Japanese men who were evacuated from Wuhan late last month have tested positive for 2019-nCoV after earlier having been cleared by the Japanese health ministry. It’s just the latest sign that the virus may be undetectable – or ‘silent’ – for a period, allowing its host to unknowingly spread it without being detected.

Health officials let the coronavirus patient in San Diego travel back to the army base quarantine briefly before realizing the error and recalling her to the hospital.

The case brings Japan’s total to 28 (not including the 136+ trapped aboard the DP).

In other news, the NYT reported late Monday that scientists are growing increasingly suspicious of Indonesia, and the fact that no cases have been reported in the country, despite thousands of tourists from Wuhan and Hubei visiting the country after the outbreak began. Many worry Indonesia is simply ignoring the threat, given that it was relatively slow to freeze flights from China. A consular official estimated that 5,000 Chinese remained in Bali alone, including 200 people from Wuhan.

“So far, Indonesia is the only major country in Asia that does not have a corona case,” Indonesia’s security minister, Mohammad Mahfud MD, told reporters on Friday. “The coronavirus does not exist in Indonesia.”

None of the 285 people who were evacuated from Wuhan and are now in quarantine on the Indonesian island of Natuna have shown signs of the virus, he added.

* * *

Update (0800ET): CNBC’s Eunice Yoon tweeted out a report that aired early Tuesday morning on CNBC detailing the struggles of one factory owner as China lurches slowly back to work.

The takeaway: Much of China’s economy, particularly its industrial core, remains shuttered.

* * *

A 13th case of the Wuhan coronavirus has been confirmed in the US after one of the Americans who traveled to California from the epicenter of the outbreak on an evacuation flight last week has been determined to have contracted the virus.

Like with cockroaches, where there is one case of coronavirus, there will likely be more, especially since the patient traveled on a long-haul flight with dozens of others, increasingly the likelihood that at least some of them were infected. The State Department chartered four flights to rescue more than 800 Americans who had been trapped in Wuhan by the quarantine passed by Chinese officials on Jan. 23. One American who apparently opted to stay behind in Wuhan has succumbed to the virus, according to Chinese officials.

Even more alarmingly, the evacuee was accidentally mistakenly released from UC San Diego Medical Center, though she wasn’t released to the public: All evacuees will spend 14 days on designated military bases being repurposed as quarantines. The case was the first in San Diego.

Initially, the hospital reported that four patients undergoing testing at the hospital had tested negative for the virus, and they were discharged and returned to federal quarantine at Marine Corps Air Station Miramar, where more than 200 evacuees are staying. However, “further testing revealed that one of the four patients tested positive for 2019-nCoV,” CDC officials advised San Diego Public Health on Monday morning, and the person was returned to hospital” for observation, the hospital said in a statement.

The CDC said it’s tracing all of the individual’s contacts since arriving in the US, Reuters reports.

“CDC is conducting a thorough contact investigation of the person who has tested positive to determine contacts and to assess if those contacts had high risk exposures.”

Most US-China flights have been suspended by the White House, and only a handful of American nationals arriving on commercial flights from China have been quarantined under rules imposed on Feb. 2 to curb the virus’s spread.

There are now at least 3 cases of the virus diagnosed in California.

One of the private jets that carried Americans back from Wuhan

Out of eight states that have set up airport screenings for the virus, only six of them said they had no one under quarantine, while NY said it had 4 and Illinois aid it had a “tiny” number.

In China, the scapegoating continued on Tuesday as Beijing fired two of the most senior health officials in Hubei just hours after officials reported 108 new deaths from the virus on Monday, the first time a daily death toll has topped 100. Only 2 of the more than 1,000 deaths occurred outside mainland China.

Zhang Jin, the Communist party boss of the provincial health commission in Hubei, and its director Liu Yingzi were removed by decree of the party yesterday.

In their stead, senior Beijing official Chen Yixin has been sent to Wuhan to lead virus-suppression efforts at the crisis’s ground zero. Chen, a former deputy party chief in Hubei, will be deputy head of a central government group dispatched to the province.

Additionally, 3 senior Wuhan officials have been summoned to Beijing to explain their failings, according to state media reports cited by the SCMP.

Authorities were accused of playing down the extent of the outbreak in early January because they wanted to project an image of stability.

Wuhan authorities also faced criticism for going ahead with an annual public banquet for 40,000 families just days before the city was placed on lockdown, according to the Daily Mail. Beijing is of course trying to deflect attention from the senior Party leadership’s failures – failures that are implicit in their policies which guarantee the suppression of information during crises. However, the death of Dr. Li Wenliang late last week made it almost inevitable that the locals in Wuhan and Hubei would be punished – after all, it was Wuhan police who initially reprimanded Dr. Li for his warnings about the outbreak. Warnings that, if heeded, would have helped save hundreds of lives.

A top Red Cross official in Wuhan was also removed for dereliction of duty earlier this month. Local officials have faced an intense backlash almost since the beginning, once it had become clear that the virus had been allowed to spread within Wuhan without police or health authorities doing anything to stop it.

“Right now I’m in a state of guilt, remorse and self-reproach” said the official in an interview with CCTV last month.”

“If strict control measures had been taken earlier, the result would have been better than now.”

In South Korea, Reuters reports that the first confirmed coronavirus patient is returning to Wuhan (apparently despite the lockdown) after being discharged by the South Korean medical team that treated her.

While searching through virus-related headlines this morning, we stumbled on a telling example of Beijing’s strategy of extreme media censorship after its brief experiment with ‘openness’ provoked widespread public rage Consider this contrast: A doctor who helped lead the fight against SARS in Hong Kong warned Tuesday that nCoV could infect “60% to 80%” of the global population if left unchecked. While on the mainland, the state media reported that another veteran SARS fighter named Zhong Nanshan, the Chinese government’s senior medical adviser, is claiming that the outbreak is peaking right now.

In an interview with Reuters, the 83-year-old scientists who helped fight the SARS epidemic said his model showed the virus should peak in the middle of February.

Echoing comments from President Trump, the scientist added that he hoped the virus would peter out by April.

“I hope this outbreak or this event may be over in something like April,” he said in a hospital run by Guangzhou Medical University, where 11 coronavirus patients were being treated.

“We don’t know why it’s so contagious, so that’s a big problem,” added Zhong, whose previous forecast of an earlier peak turned out to be premature. He said there was a gradual reduction in new cases in the southern province of Guangdong where he was, and also in Zhejiang and elsewhere.

Finally, the man from Brighton believed to be the ‘super spreader’ linked to 11 cases involving a French ski chateau has broken his silence, according to the Guardian.

His name is Steve Walsh, he’s 53 years old, and this is his story:

“I would like to thank the NHS for their help and care – whilst I have fully recovered, my thoughts are with others who have contracted coronavirus.”

“As soon as I knew I had been exposed to a confirmed case of coronavirus I contacted my GP, NHS 111 and Public Health England.”

“I was advised to attend an isolated room at hospital, despite showing no symptoms, and subsequently self-isolated at home as instructed.”

“When the diagnosis was confirmed I was sent to an isolation unit in hospital, where I remain, and, as a precaution, my family was also asked to isolate themselves.”

“I also thank friends, family and colleagues for their support during recent weeks and I ask the media to respect our privacy.”

Over in Hong Kong, dozens of residents of a housing complex in Hong Kong have been quarantined after two people living on separate floors were infected with the virus, raising the possibility that it might have been traveling through the pipes.

Per local officials from Hong Kong’s Center for Health Protection, the decision to partially evacuate the building was made after investigators discovered an unsealed bathroom pipe in the apartment of a 62-year-old woman found to be infected. She lives 10 floors below another resident who was found to be infected, the NYT reports.

Yesterday, we reported that the Westerdam cruise ship had finally been granted permission to dock in Thailand after being turned away from three other countries, despite having ZERO confirmed nCoV cases aboard. Now, Thailand has rejected it, leaving it once again adrift. The ship is set to run out of food and other essentials in just two days.

DESPERATE PATIENTS SWARM WUHAN HOSPITAL AS HONG KONG CLOSES BORDER

Desperate Patients Swarm Wuhan Hospital as Hong Kong Closes Border

Medical facilities overwhelmed at virus outbreak’s epicenter

Zero Hedge – FEBRUARY 3, 2020

Late last night, we reported that the death toll from the coronavirus outbreak had surpassed 360 as more suspected cases popped up in New York.

Though no deaths have been reported overnight, Chinese officials warned yesterday that many more cases and deaths would be confirmed on Sunday/Monday.

In the meantime, Chinese markets finally faced their inevitable reckoning. Despite the best efforts of the PBOC and the government, the Chinese market bloodbath was about as bad as expected.

Matt Bracken joins The Alex Jones Show to analyze the state of the world amid a potential pandemic.

But over in the US, investors ignored the latest news out of China and have seemingly bought into the WHO’s optimistic message and China’s accusations about an ‘alarmist’ Washington.

This is surprising, since anybody who has been paying close attention to the situation in China should know that this is far from the truth.

Late last night, while most of America was watching the Superbowl, the New York Times published a scathing story recounting what it’s like on the ground in Wuhan right now. The truth is that all of the warnings of alleged ‘conspiracy theorist’ have more or less turned out to be correct. Supply shortages are still making it impossible for China to diagnose every case of the virus.

Ms. An, 67, needed an official diagnosis from a hospital to qualify for treatment, but the one she and her son raced to last week had no space, even to test her. The next hospital they were referred to here in Wuhan, the city of 11 million people at the center of the outbreak, was full, too, they said. They finally got an intravenous drip for Ms. An’s fever, but that was all.

Since then, Ms. An has quarantined herself at home. She and her son eat separately, wear masks at home and are constantly disinfecting their apartment. Ms. An’s health is declining rapidly, and even keeping water down is a struggle.

“I can’t let my mom die at home,” said her son, He Jun. “Every day I want to cry, but when I cry there are no tears. There is no hope.”

Chilling stuff. And once again, doctors and health-care workers are leveraging their newfound immunity to shed a light on the government’s brutality.

Last month, the government put Wuhan in a virtual lockdown, sealing off the city and banning most public transportation and private cars from its streets in a desperate effort to contain the outbreak. Now, many residents say it is nearly impossible to get the health care they need to treat – or even diagnose – the coronavirus.

Expressing exasperation, doctors say there is a shortage of testing kits and other medical supplies, and it is not clear why more are not available. The ban on transportation means some residents have to walk for hours to get to hospitals – if they are well enough to make the journey. Layers of bureaucracy stand between residents and help. And the long lines outside hospitals for testing and treatment suggest that the outbreak is spreading far beyond the official count of cases.

For many sickened residents, their best hope is the new coronavirus hospital that has just been finished (a second hospital is also being built).

Those who do make it to the hospital say they are squeezed together for hours in waiting rooms, where infections are easily spread. But the shortages have meant that many are ultimately turned away and sent home to self-quarantine, potentially compounding the outbreak by exposing their families.

Many doctors and residents are putting their hopes on the two new coronavirus hospitals that China has been racing to build in Wuhan in just a matter of days. One of them spans about eight acres, has 1,000 beds and is scheduled to open on Monday. The government says 1,400 military medical workers will be deployed to work there, potentially helping with the shortage of health professionals on hand to combat the outbreak.

Ironically, the hospital, which was supposed to open on Monday, is still undergoing ‘finishing touches’, and when masses of sick patients showed up at the gates on Monday morning, construction workers were forced to turn them away.

More than a week into the quarantine/lockdown, millions of residents fear the virus has spread much further than the government realizes.

On Sunday, city officials announced plans to set up quarantine stations around Wuhan for people with symptoms of pneumonia and close contacts among coronavirus patients. But just over a week into the lockdown, many residents believe the virus has already spread much further than the official numbers suggest.

“The situation that we’ve seen is much worse than what has been officially reported,” Long Jian, 32, said outside a hospital where his elderly father was being treated. Mr. Long said his father had to go to six hospitals and wait seven days before he could even be tested for the coronavirus.

But after Monday’s market shellacking, we suspect Beijing will be diverting more resources away from meeting critical shortages of medical supplies to focus instead on arresting shortsellers and locking up ‘fearmongers’, like the doctors who were arrested by local authorities in December for trying to warn the public about the outbreak.

Notice the bars on the hospital-room windows…this hospital is a prison with beds, as we’ve pointed out.

CAP

Following reports OPEC is weighing another supply cut to ‘rebalance’ the global oil market and warnings from economists that the outbreak could wipe more than a percentage point off Chinese GDP growth, officials in Beijing have reportedly changed their economic growth forecasts for 2020 to below 5%, what would be the lowest rate of growth since the beginning of China’s modern era of state-directed capitalism.

To help the economy cope, Beijing is reportedly considering more stimulus measures to try and bolster growth.

Of course, the fallout won’t be limited to China, and in a report published Monday, WSJ explores how the outbreak is already disrupting global supply chains and placing “additional strain” on an increasingly fragile economic expansion.

As we’ve pointed out, the outbreak has stoked racism against Chinese around the world.

If you’re looking for a quick refresher on the outbreak, here’s a short video from SCMP.

On a slightly more positive tip, Chinese state media posted this video about an infected woman who gave birth to a healthy baby in the middle of the crisis.

CAP

And here’s a video of a drone being used to take the temperature of a terrified civilian trapped by decree inside their apartment.

Finally, RT points out that the death toll from the coronavirus outbreak has already eclipsed the death toll from SARS, as the virus has spread to nearly two dozen countries and territories. The pandemic will eventually “circle the globe,” according to scientists from the NYT.

Given the fear of the virus ravaging densely populated areas, the people of Hong Kong have succeeded in pressing the city’s government to tighten travel restrictions, joining the US, Vietnam, Japan, Russia, Australia, New Zealand, Indonesia and many others.

CAP

Hong Kong has shut crossings to the mainland. But even this is likely too little, too late, as the first cases have already been diagnosed in the city.

Members of the G-7 will hold an emergency call on Monday to discuss strategies for containing the outbreak.

Get ready for another week of virus-induced craziness as this doesn’t look ready to disappear from the headlines any time soon.

Could coronavirus be the recessionary catalyst that triggers a global economic downturn? RT’s Boom Bust investigates

CAP

While the markets have slightly rebounded after the shock of the coronavirus outbreak, the effects of the crisis could ripple across industries, ex-Fed insider Danielle DiMartino Booth believes.

After sliding to the lowest close in over a week on Friday over the spread of the deadly virus, US stocks rebounded slightly as the new trading week began, with the key Dow Jones Industrial Average index climbing over 200 points on Tuesday. However, the markets could still grossly underestimate the consequences of the outbreak and are just hinging on the Fed’s injections, says former Fed insider Danielle DiMartino Booth.

“The markets are woefully underestimating the important economic impact globally of what this [outbreak] means given that we started the year leaning on multinationals to charge out of the US earnings recession and leaning on Germany to come out of its own industrial recession. That’s not going to happen either,” she told RT’s Boom Bust.

Booth explained that the companies which were set to lead the US out of the earnings recession are highly dependent on revenues and profits from overseas. The coronavirus could easily impede this, but the markets may still “press towards all-time highs, because they’re saying this bad news is good enough that it’s going to actually cause [the] Fed’s liquidity injections to grow.”

CIA WHISTLEBLOWER WARNS: FEDERAL RESERVE IS ‘OUT TO GET PRESIDENT TRUMP’

CIA Whistleblower Warns: Federal Reserve Is ‘Out To Get President Trump’

Central bank will ‘manipulate 2020 election and make any recession look like Trump’s fault and not the Fed’s fault,’ says Kevin Shipp.

 – AUGUST 19, 2019

The Federal Reserve has been using its central bank powers in an attempt to tank the economy to blame President Trump and manipulate the 2020 election outcome, according to CIA whistleblower Kevin Shipp.

“He [Trump] has got the Fed shaking in their boots. When the Fed gags its board of directors and its members, that is not good,” Shipp said on “USA Watchdog” with Greg Hunter on Saturday.

“Something not good is going on. Perhaps they are bringing the interest rates down to zero. Perhaps it’s the fact we are entering into, not only U.S., but a global recession. So, they have put the lid on any comments coming out, and I think they have done it for a reason that is concerning…”

“Trump is at war with the Fed, and the Fed has put a lid on all its people. It’s a gag order to keep its people from talking about what the Fed plans to do,” he continued.

“I think it is tied to an upcoming global recession, and we may see quantitative easing (money printing) rates go to zero, and they don’t want the President or the public to know what they are about to do,” Shipp added.

The Fed’s attempts to ruin Trump are obvious given how it behaved during Obama’s presidency, such as its excessive money-printing policies and holding interest rates at 0% for most of Obama’s tenure.

“So, it is apparent the Fed waited until Trump was elected to start hammering and pounding on the economy, which apparently they did not want to do under Obama,” Shipp said. “Can you raise the suspicion that the Fed is against Trump or that the Fed is trying to take the credit for the economy away from Trump? I think that appears to be entirely possible…”

“Trump has said it exactly right, it’s a war between Trump and the Federal Reserve, which, of course, is not federal and it has no reserves…

Shipp said that Trump is aware of the Fed’s moves and is correctly planning to shift blame to the Fed for any economic correction or collapse because it is the progenitor of America’s boom/bust cycles.

“In my view, I think that Trump is convinced that the Fed is going to try to destroy the advances in the economy to make 2020 less possible for re-election and actually manipulate the political landscape,” Shipp said.

“I think Trump is clearly and wisely aware of what they are doing…I think Trump thinks the Fed is going to manipulate the 2020 election and make any recession look like Trump’s fault and not the Fed’s fault.”

“God bless Donald Trump because he is the first President to call out the Fed like he is doing,” Shipp added. “Trump has been right all along.”

Trump called out the “very selfish” Fed on Monday, saying they should lower interest rates back down because the dollar is so strong thats it’s actually weakening the global economy.

 

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