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New York City 10 Days Away From ‘Widespread Shortages’ Of Medical Supplies, Mayor Says

Topline: New York City Mayor Bill de Blasio said during a Sunday CNN appearance that “if we don’t get more ventilators in the next 10 days, people will die who don’t have to die” as the city—now the epicenter of the U.S. coronavirus epidemic—faces a possible shortage of medical supplies.

  • “We’re about 10 days from seeing widespread shortages,” de Blasio said, adding, “We have seen next to nothing from the federal government at this point.”
  • De Blasio also said that the military hasn’t been mobilized by the Trump administration, and that the Defense Production Act, which the president invoked by executive order Wednesday, has not been put into motion.
  • “It feels like we’re on our own at this point,” de Blasio said, adding that April would be worse for New York City than March has been, and he fears May could be even worse.
  • CNN also reported Sunday that Federal Emergency Management Agency head Peter Gaynor could not provide a number of how many medical masks were in the federal stockpile or how many have been shipped to state and local governments.
  • In a sign of demand on medical supplies, a Friday letter from a New York-Presbyterian Hospital department head said each employee would only be given one N95 mask (when it typically uses 4,000 per day).

Big number: 300 million. That’s how many masks could be needed for healthcare workers versus the current stockpile of 30 million, as testified to Congress by Health and Human Services Secretary Alex Azar at the end of February.

Key background: The Defense Production Act is intended to be used by Trump to obtain “health and medical resources needed to respond to the spread of Covid-19, including personal protective equipment and ventilators.” Trump faced questions Thursday around his reticence to use the Defense Production Act to compel companies to produce healthcare items to combat the coronavirus, one day after he said he’d be invoking its powers. The New York Times reported Thursday that both the U.S. and countries abroad are facing a shortage of ventilators, with manufacturers saying that they can’t increase production to meet the demand.

Tangent: Tesla CEO Elon Musk volunteered his company’s factories to manufacture ventilators, but it’s unclear whether that will move forward.

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I’m a New York-based journalist covering breaking news at Forbes. I hold a master’s degree from Columbia University’s Graduate School of Journalism. Previous bylines: Gotham Gazette, Bklyner, Thrillist, Task & Purpose and xoJane.

Source: New York City 10 Days Away From ‘Widespread Shortages’ Of Medical Supplies, Mayor Says

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Hospitals are sounding the alarm that they need more equipment as the coronavirus outbreak grows. Greg Cergol reports.

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Life in China Has Not Returned to Normal, Despite What the Government Says

Over seven years as a media executive living in Asia, Brian Lee has made the two-hour hop from Seoul to Shanghai more times than he can remember. But his last flight, on March 9, will be difficult to forget. On arrival at Shanghai’s Pudong International Airport, Lee was told that regulations had tightened while he was in the air and all passengers arriving from South Korea now had to submit to 14 days’ government quarantine due to the COVID-19 outbreak.

The New Yorker was driven to a specially requisitioned three-star hotel, where nurses in hazmat suits handed him a mercury thermometer, to self-check his temperature twice daily, and a single plastic trash bag. Meals are left outside his door at 8:30 a.m., 12 noon and 6 p.m. each day. Other than opening his door to pick up his food, he has not seen beyond the drab confines of his room since. “I’m trying to stay active and positive,” says Lee, 27, a business manager for Shanghai-based media platform Radii. “I’ve been doing pushups and trying to do all the reading and writing that I haven’t had time for.”

As cases of COVID-19 stabilize in China and soar across the U.S., Middle East and Europe, the Beijing government has been busy recasting China as a sanctuary from the deadly virus, which has so far sickened 169,000 and killed at least 7,000 across the world. China’s strongman President Xi Jinping even visited the central city of Wuhan, the epicenter of the outbreak, on March 10. China’s strongest leader since Mao Zedong declared that the virus was “basically curbed” across Hubei province, where Wuhan is the capital.

Virus Expert on the Wuhan Coronavirus Outbreak: ‘Don’t Be Complacent. We Must Treat It Extremely Seriously’

Hong Kong infectious disease expert Yuen Kwok-yung discussed the situation of the Wuhan coronavirus outbreak with TIME in an exclusive interview. He warns that the disease is very infectious and control measures must be followed.

When TIME visited Wuhan in the early days of the outbreak on Jan. 22, students were still gossiping in cafes, while shoppers browsed for meat and fish for Lunar New Year festivities. But the city that Xi toured was a ghostly relic after seven weeks of bruising quarantine that has decimated the local economy. Still, China’s official press agency Xinhua has already announced a forthcoming book on how Xi’s “outstanding leadership as a great power leader” defeated the virus. The Great Power War will be available in six languages. State media has engaged in unabashed triumphalism while describing the U.S. response as “floundering.”

But even as Chinese Communist Party (CCP) propaganda ramps up, the experiences of people like Lee show that life across the Asian superpower remains far from normal. Offices are slowly reopening but central heating banned for fear of spreading germs. Taxi drivers hang sheets of plastic behind the front seats of their cabs to cocoon themselves from passengers. One friend in Beijing returned to work to find “the receptionist in a full white hazmat suit.” Another complained that the incessant spraying of germ-killing bleach had murdered all the office plants. The guy who installed my cable TV has also begun hawking medical masks, which are de rigueur for entering any supermarket. Grabbing noodles with my wife means sitting diagonally across a four-person table to comply with social distancing rules. When I tried to book an appointment with a lawyer, it had to be in Starbucks—her office had banned visitors—and even then the barista chastised her for standing closer than four feet while witnessing me signing documents.

More than anything, suspicion has shifted outward. Whereas ethnic Asians have faced prejudice around the globe due to the virus, inside China the tables have turned, with foreigners now the target of suspicion as cases rise overseas. This has been catalyzed by state propaganda leaping on China’s apparent success in stemming the virus as evidence that its political system is superior to Western-style democracy.

It would be “impossible for European countries to adopt the extreme measures that China has implemented” to fight the virus, the CCP mouthpiece Global Times argued in a recent editorial. Sure enough, Robert Redfield, director the U.S. Centers for Disease Control and Prevention, told American lawmakers March 10 that [in terms of infections] “the new China is Europe.”

Security guards bark inquisitions when they see a foreign face—“what’s your nationality? where have you been for the last two weeks?”—so that many outsiders limit their social interactions to where they feel best known. My local barber says he not longer serves foreign customers.

Suspicion is especially pronounced for Italians, given their homeland’s rise to second in COVID-19 cases after China, with 25,000 infected. Ambra Schiliro, president of the Sicily Association in China, says that one Italian under self-quarantine in her Shanghai apartment had angry neighbors call the police to demand she move to a hotel. Andrea Fenn, a member of the Italian Chamber of Commerce in China, says that after some clients came to his office his Chinese partner discretely asked him, “Were they Italian? Where had they come from? Could I vouch for them?” Still, “It was an understandable reaction,” he says, “and nothing compared to the discrimination Asian people experienced in Italy at the beginning of the crisis.”

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Suspicion may be quite natural given Chinese state media’s self-serving tactic of highlighting the number of new COVID-19 cases that have arrived from overseas. On March 16, state media reported that 12 of the day’s 16 new COVID-19 infections were imported. On March 17, it was 20 out of 21. As such, in glaring doublespeak, Beijing’s own travel restrictions are deemed “essential measures,” even as countries that have closed borders with China are denounced.

Stefen Chow was lucky that he was permitted to self-quarantine in his own home upon arriving in Beijing after visiting his family home in Singapore. Only he was allowed to venture outside to collect deliveries, however, while his wife and two young children—aged four and six—couldn’t leave their front door for 14 days.

But much like what’s currently unfolding in the U.S., regulations for each Chinese city differ, and the lack of clarity regarding containment protocols has a chilling effect on business. Currently, even those traveling from Shanghai to the neighboring city of Suzhou for a meeting are technically required to submit to 14 days quarantine, perhaps even at a government facility, meaning few take the risk of venturing beyond the city limits. Those who have stayed at home must also self-quarantine if a roommate or family member returns from overseas or another province.

But in practice, implementation is largely at the discretion of CCP neighborhood committees, known as ju wei hui, or individual security guards — some of whom use their new power to shamelessly flirt with passers-by. “It has been frustratingly confusing,” says Ker Gibbs, president of the American Chamber of Commerce in Shanghai. “People don’t know if they can access their own apartment building, let alone their office.”

Returning to some semblance of normalcy is imperative for the Chinese and global economies. According to official data, China’s manufacturing and services sectors sank to record lows in February, car sales plunged by 80%, and China’s exports dropped 17.2% overall in January and February. As of March 18, China’s economy was operating at 71.% of typical output, according to policy research firm Trivium. Factories are being inspected one-by-one before getting the green light to reopen, but the pace of revival will depend on the nature of business; services can recover much faster than manufacturing, for example, given the latter’s reliance on knotty supply chains. High-tech and highly automated manufacturing also has a greater capacity to bounce back, being less labor-focused.

But with demand expected to crater across every sector, especially as the virus goes global, all anticipate lean times ahead. More than 100 real estate firms across the country filed for bankruptcy in January and February. Officials have been encouraging both state and private landlords to waive rents to prevent more firms going under. “I would still give [the government] reasonably high marks for communication and being proactive with business community,” says Gibbs.

Still, the state is keeping a very close eye on those attempting to re-energize the world’s number two economy. Across China, officials outside office buildings and residential compounds note visitors’ names, contact information, ID numbers and travel history in order to feed to a police database. People in some cities must register phone numbers with an app in order to take public transport. Online retail giant Alibaba has rolled out its Health Code App across 200 Chinese cities that rates users green, yellow or red dependent on travel history and possible contact with infected people. Anyone who has left the city in the past two weeks is liable to get a yellow code, and with green mandatory for access to most malls and office buildings in big cities, few book frivolous travel lest they jeopardize their score. A red code requires 14 day quarantine.

Apart from privacy concerns across what is already the world’s most surveilled state, the app has sparked consternation among those suddenly ordered to quarantine themselves with no explanation why.

There is growing weariness about measures that are little more than box-ticking. Masks are mandatory outside the home despite huge doubts over their efficacy. A temperature test is required to enter any shop, restaurant building, or even pass certain street corners. But these are so casually administered that people with readings so low as to indicate clinical hypothermia are routinely waved by. On countless occasions I’ve been rudely accosted by a supercilious doorman only for him to point the temperature gun at my coat sleeve. It’s especially frustrating since COVID-19 can spread while asymptomatic, rendering these tests ultimately pointless.

Bosses unused to employees working from home are putting them under extreme pressure, believing only increasing workload can ensure productivity at home. Miss Li, who works for Beijing start-up Bytedance and asked that TIME only uses one name as she was not permitted to speak with the media, says that she used to work 9 am to 9 pm, 6 days a week, commonly known by the shorthand “996” in China. “But now we joke that has become 007—midnight to midnight, 7 days a week,” she says.

And despite official efforts to spin the disaster, initial bungling and attempts to coverup the crisis mean the Party’s legitimacy will take a hit. A campaign to ensure the people of Hubei express “gratitude” to the CCP for containment efforts received short shrift. “The government should end its arrogance and humbly express gratitude to its masters—the millions of people in Wuhan,” wrote noted blogger Fang Fang in a post of remarkable bravery given China’s strict censorship.

Another comment appended to the profile of a whistleblower doctor quickly went viral: “The doctor risks her job to take interview, the reporter risks being charged with fabricating rumors to write the article, the media risks being shut down to publish the article, and people on WeChat risk having their accounts blocked to share the article. Today we need this ridiculous level of tacit cooperation just for a word of truth.”

Of course, truth in China is whatever the Party deems it to be. One recent afternoon, I noticed four medical personnel in hazmat suits loitering outside my apartment building. After a few minutes a neighbor pulls up with airport tags on her luggage. The medical staff check her temperature, make her sign various papers and escort her home. She won’t reappear for 14 days. Suddenly alarmed, I opened my Health Code App to check my rating is still green. China may spy victory over the virus, but normal lies a long way off, if it ever returns at all.

By Charlie Campbell / Shanghai March 18, 2020

Source: Life in China Has Not Returned to Normal, Despite What the Government Says

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Mar.12 — The faltering return of China’s oil refineries, power plants and gas importers shows it’s too soon to count on the world’s biggest energy user to revive beleaguered global prices. Meanwhile, while corporate-debt markets shut down for issuers in the U.S. and Europe for a stretch in February, with investors spooked by the economic hit from the coronavirus, China had its busiest month on record. Bloomberg’s Selina Wang reports on “Bloomberg Markets: Asia.”

U.S. Stocks Claw Back Some Losses As Oil Prices Rebound

Topline: U.S. stocks recovered some losses on Thursday and oil prices soared, though the modest gains were not enough to offset the damage done by a weeks-long sell-off.

  • The Dow Jones Industrial Average was up 0.8%, or 170 points. The S&P 500 gained 0.3% while the Nasdaq gained 2.3%.
  • Tech stocks led the way on Thursday, with Amazon up 2.8% and Microsoft up 1.6%.
  • At a press conference on Thursday afternoon, President Trump said he would consider for companies who receive bailouts under his administration’s proposed $1 trillion stimulus plan.
  • Central banks are also continuing to act in order to cushion the economic blow of the coronavirus outbreak: yesterday, the European Central Bank announced an $818 billion bond-buying program and the Federal Reserve said it will act to shore up prime money market funds.

Crucial quote: “Central banks, particularly the Fed, really are playing whack-a-mole with the financial system,” Eric Winograd, senior economist at AllianceBernstein, told CNBC. “Every day, a new area of distress pops up and every day, they’re coming up with a new program or rebooting an old program.” The Federal Reserve is taking extraordinary steps to stabilize the U.S. economy: it has cut interest rates to almost zero, said it’s prepared to inject trillions of dollars into the overnight repo market, slashed bank reserve requirements and agreed to buy short term debt from companies with good credit ratings.

Big number: The price of oil bounced 24% on Thursday, gaining back about half of its losses from Wednesday, when it reached a multi-decade low. According to reporting in the Wall Street Journal citing people familiar with the matter, the Trump administration is considering intervening in the ongoing oil-price war between Saudi Arabia and Russia.

Key background: The Dow dropped 6.3% yesterday, nearly 2,000 points, while the S&P 500 was down 5.2% and the Nasdaq slid 4.7%. It was the eighth consecutive day where the S&P 500 swung more than 4% in either direction—that level of volatility is far worse than the previous record of six days during the Great Depression, according to LPL Financial. Last night, President Donald Trump signed a coronavirus relief bill into law. The bill includes free coronavirus testing and paid sick leave, among other measures. The Trump administration is also pushing for a $1 trillion economic stimulus package.

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I’m an assistant editor on Forbes’ Money team, covering markets, fintech, and blockchain. I recently completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance and the Foreign Corrupt Practices Act.

Source: U.S. Stocks Claw Back Some Losses As Oil Prices Rebound

U.S. stocks plunged amid anxieties of a free-fall in oil prices and escalating spread of the COVID-19, with all three major indexes declining more than seven percent.  Trading was halted for 15 minutes after the S&P 500 fell by seven percent, and resumed at 9:49 local time (1349 GMT). Subscribe to us on YouTube: https://goo.gl/lP12gA Download our APP on Apple Store (iOS): https://itunes.apple.com/us/app/cctvn… Download our APP on Google Play (Android): https://play.google.com/store/apps/de… Follow us on: Website: https://www.cgtn.com/ Facebook: https://www.facebook.com/ChinaGlobalT… Instagram: https://www.instagram.com/cgtn/?hl=zh-cn Twitter: https://twitter.com/CGTNOfficial Pinterest: https://www.pinterest.com/CGTNOfficial/ Tumblr: http://cctvnews.tumblr.com/ Weibo: http://weibo.com/cctvnewsbeijing Douyin: http://v.douyin.com/aBbmNQ/

The Market’s in Panic Mode.. Stock Markets Plunge 12% Amid Coronavirus Fears

Mandatory Credit: Photo by JAMES GOURLEY/EPA-EFE/Shutterstock (10584160h)
A view of digital market boards at the Australian Stock Exchange (ASX) in Sydney, Australia, 16 March 2020. The ASX dropped more than 7 percent at the opening of trade as concerns over the coronavirus and COVID-19 pandemic grow. Australian Stock Exchange (ASX) drops at opening on coronavirus concerns, Sydney, Australia – 16 Mar 2020

(Bloomberg) — The stomach-turning ride on global financial markets took a dramatic turn Monday, with U.S. stocks plunging the most since 1987 after President Donald Trump warned the economic disruption from the virus could last into summer.

The S&P 500 sank 12%, extending losses as Trump said the economy could fall into a recessoin. Equities opened sharply lower after central bank stimulus around the world failed to mollify investors worried about the damage the coronavirus is inflicting on economies.

The negative superlatives for American stocks are piling up. The S&P wiped out its gain in 2019 and is now down almost 30% from its all-time high. The Dow Jones Industrial Average lost almost 13%, falling 3,000 points to close at at two-year low. The Russell 2000 had its worst day on record, losing more than 14%.

“This is different. The thing that is scarier about it is you’ve never been in a scenario where you shut down the entire economy,” said Steve Chiavarone, a portfolio manager with Federated Investors. “You get a sense in your stomach that we don’t know how to price this and that markets could fall more.”

While the Fed cut rates toward zero and stepped up bond buying, investors continued to clamor for a massive spending package to offset the pain from closures of schools, restaurants, cinemas and sporting events. Companies around the world have scaled back activity to accommodate government demands to limit social interaction.

Here are some of Monday’s key moves across major assets:

  • All 11 groups in the S&P 500 fell, with eight of them down at least 10%.
  • The Dow Jones Industrial Average’s tumble from its record reached 30%.
  • Brent crude dipped below $30 a barrel for the first time since 2016.
  • Treasury yields retreated across the curve with moves most pronounced on the short end.
  • Shares tumbled in Asia and Europe, where the continent is now reporting more new virus cases each day than China did at its peak as more countries lock down.
  • The yen surged, the Swiss franc rallied and the dollar fluctuated.
  • Gold failed again to capitalize on the rush to havens and reversed an earlier gain to tumble.
  • Bonds declined across most of Europe, where a measure of market stress hit levels not seen since the 2011-2012 euro crisis.

The Fed and other central banks have dramatically stepped up efforts to stabilize capital markets and liquidity, yet the moves have so far failed to boost sentiment or improve the rapidly deteriorating global economic outlook. An International Monetary Fund pledge to mobilize its $1 trillion lending capacity also had little impact in markets.

The problem is, bad news keeps stacking up. The New York Fed’s regional gauge of factory activity plunged. Ryanair Holdings Plc said Monday it will ground most of its European aircraft while a consultant said the pandemic will bankrupt most airlines worldwide before June unless governments and the industry step in. Nike Inc. and Apple Inc. announced mass store closings.

“In normal circumstances, a large policy response like this would put a floor under risk assets and support a recovery,” Jason Daw, a strategist at Societe Generale SA in Singapore, wrote in a note. “However, the size of the growth shock is becoming exponential and markets are rightfully questioning what else monetary policy can do and discounting its effectiveness in mitigating coronavirus-induced downside risks.”

The yen rebounded from Friday’s plunge after the Fed and five counterparts said they would deploy foreign-exchange swap lines. Australian equities fell almost 10%, the most since 1992, even after the Reserve Bank of Australia said it stood ready to buy bonds for the first time — an announcement that sent yields tumbling. New Zealand’s currency slumped after an emergency rate cut by the country’s central bank.

Meanwhile, China reported Monday that output and retail sales tumbled in the past two months.

These are the main moves in markets:

Stocks

  • The S&P 500 fell 11.98% as of 4 p.m. in New York.
  • The Dow Jones Industrial Average plunged 12.93%
  • The Stoxx Europe 600 Index lost 4.9%, paring a drop that reached 10%.
  • The MSCI Emerging Market Index declined 6.3%.
  • The MSCI Asia Pacific Index decreased 3.7%.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2%.
  • The euro gained 0.5% to $1.1162.
  • The Japanese yen strengthened 1.8% to 105.94 per dollar.

Bonds

  • The yield on two-year Treasuries sank 14 basis points to 0.35%.
  • The yield on 10-year Treasuries declined 22 basis points to 0.73%.
  • The yield on 30-year Treasuries declined 22 basis points to 1.31%.
  • Germany’s 10-year yield climbed seven basis points to -0.47%.

Commodities

  • West Texas Intermediate crude fell 9.2% to $29.05 a barrel.
  • Gold weakened 4.3% to $1,463.30 an ounce.
  • Iron ore sank 2.5% to $86.10 per metric ton.

—With assistance from Claire Ballentine, Elena Popina and Elizabeth Stanton.

By Jeremy Herron and Vildana Hajric / Bloomberg

Source: ‘The Market’s in Panic Mode.’ Stock Markets Plunge 12% Amid Coronavirus Fears

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The spread of information is fast, so whatever happens makes the stock market crash fast. People are selling in panic as the market might go down more. The fact is nobody knows what will happen. The only thing that works always is being prepared for anything, invest for the long-term and keep rational. Want to know more about my research and portfolios? Here is my independent stock market analysis and research! STOCK MARKET RESEARCH PLATFORM (analysis, stocks to buy, model portfolio) https://sven-carlin-research-platform… Sign up for the FREE Stock Market Investing Course – a comprehensive guide to investing discussing all that matters: https://sven-carlin-research-platform… I am also a book author: Modern Value Investing book: https://amzn.to/2lvfH3t Check my website to hear more about me, read my analyses and about OUR charity. (YouTube ad money is donated) http://www.svencarlin.com Listen to Modern Value Investing Podcast: https://svencarlin.com/podcasts/ I am also learning a lot by interning with my mentors: dr. Per Jenster and Peter Barklin at the Niche Masters fund. http://nichemastersfund.com #stockmarketcrash #market #stocks

Will The Stock Market Drop By Half?

In 2008 the S&P fell half off its peak and nothing physical happened to the economy. Now we have two very physical things — supply and demand shocks. The strategy of no strategy means these two physical problems will continue until a vaccine is produced, i.e. likely not for a year or more.


On February 25th, I predicted a massive drop in the stock market due to the coronavirus. At that point it had already fallen 8% from its peak. Today, it’s 20% below its peak. I think it will fall 50% below peak.

That may be conservative. In the Great Recession, the S&P fell half from its peak and nothing physical happened to the economy. Now we have two very physical things — what economists call supply and demand shocks — happening. A growing share of the labor force is not going to work and a growing share of consumers are shunning retail outlets and all other manner of service establishments for fear of getting infected.

Let me give you my partial list of the businesses that I think will go under. I think restaurants will fail. I think coffee shops will fail. I think dry cleaners will fail. I think airlines will fail. I think cruise boat companies will fail. I think hotels will fail. I think department and boutique clothing and other retail stores will fail. I think travel agencies will fail. I think movie theaters will fail. I think universities and colleges will fail. I think theaters will fail. I think theme parks will fail. I think spas will fail. I think resorts will fail. I think convention centers will fail. I think malls will fail. I think gyms will fail. I think orchestras will fail. I think hair salons will fail. I think nail salons will fail. I think barber shops will fail. I think bars will fail. I think every business that’s not online and involves customers will fail.

What share will fail?

Ten percent is optimistic.

Let me justify my view. Containing the coronavirus requires two months at a minimum. Why two months? This is the time it’s taken China to bring new infections down to single digits. Even so, China has not lifted the lockdown of Hubei Province. Indeed, every city you enter in China is now requiring a two-week period of quarantine. China is enforcing this with technology and people. You enter into Shanghai and you’re asked where you are staying. Once you get there, the neighborhood officials, who have been electronically notified of your arrival, check on you daily to make sure you are staying inside.

What happens when China’s new infection rate goes to zero? Will it lift its restrictions? Hard to say. If I’m President Xi and have gone to such lengths to eliminate the problem, I don’t want to run the risk that someone has a four-week incubation period or has slipped across the border carrying the virus and all hell breaks out again. In short, it may be a long time before China returns to something close to normal. Even then, foreigners arriving in China will surely need to spend two weeks in confinement before being let loose on the streets.

We don’t know China’s end game. But we’re pretty sure it has one. The US has no end game. Yes, the president has finally gotten serious about bringing testing on line. But it can take two weeks for infected people to show symptoms. Indeed, 1% will first show symptoms after two weeks. Suppose Joe Blow contracts the virus today. Say ten days later he starts feeling symptoms but he waits another five days to get tested. Then it takes two days to get results at which point he self quarantines or heads to the hospital. Now he’s had 17 days to infect a motherload of people either directly or indirectly. Maybe Joe works in a nursing home. We’ve seen the damage one person with coronavirus can do to a nursing home. The Life Care Center in Kirkland, Washington had 120 residents. In recent weeks, 26 have died. Another 24 are definitely infected. And many of the Center’s staff have symptoms, but, as of two days ago, have yet to be tested.

Okay, back to Joe. He gets tested on day 15. But on day 14 he infects Jane Doe who also takes 15 days before going into quarantine, but infects Jack, Jill, and Sandy on day 14. You see where I’m going. Our voluntary (we or our docs decide) testing system does nothing to keep the coronavirus infection from rolling along for months if not years.

Here’s a policy that would actually save lives and the economy. Quarantine the entire country for two weeks. Italy is doing this, although no one knows its duration. At the end of two weeks, test everyone — all 327.2 million people plus any visitors and continue testing everyone once a week for months. Anyone who tested positive would, of course, be quarantined or hospitalized. We would also reopen the borders, but test everyone coming into the country. This is a policy that would a) stop the spread of the infection in its tracks and b) limit the renewed spread of the infection once the quarantine is lifted.

Could we produce hundreds of millions of tests? Yes. During WWII, we built cargo ships in four days. Can we put everyone under quarantine for two weeks? Yes, the president has this authority. Can we require weekly testing. Again, the answer is yes.

Will our president do this? Clearly not. According to him, the “foreign” virus is going to disappear on its own and in short order. President Trump is, himself, possibly infected by way of an aide to Brazil’s president. But, thus far, he has chosen not to get tested. In the meantime, he may have infected or be infecting his top aides as well as his family. And members of his administration may have infected or be infecting much, if not most of Congress. Beyond jeopardizing so many people, the president is setting the worst possible example.

The strategy of no strategy means the two physical problems hammering the economy will continue until a vaccine is produced, i.e. likely not for a year or more. How many retail and service establishments can survive that long without customers, while retaining their employees? Not many. Hence, we can expect a massive wave of layoffs and bankruptcies starting next week.

There are two other reasons to expect a 50% from peak decline in the stock market. First, the market was perceived by many to be overpriced to begin with. Second, corporate America is dramatically over leveraged. To quote the Fed, “The ratio of debt to assets for all publicly traded non-financial companies has hit its highest level in two decades, and the leverage ratio among debt-heavy firms is near a historical high.” The higher the leverage ratio, the larger the percentage decline in stock values for a given percentage reduction in profits.

Moreover, over half of corporate debt is rated BBB compared to roughly 25% in 2008. This means that a large share of corporate America faces solvency risk. Here’s the BBB rating description: “A BBB rating reflects an opinion that the issuer has the current capacity to meet its debt obligations but faces more solvency risk.”

There’s more, but you get the picture. I hope I’m wrong, but I fear an even bigger drop in the market is coming.

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I am a professor of economics at Boston University, a Fellow of the American Academy, a Research Associate of the NBER, and President of Economic Security Planning, Inc. — a company that markets personal financial planning tools at maxifi.com, maximizemysocialsecurity.com, analyzemydivorccesettlement.com, and economicsecurityplanning.com. Recent books: Get What’s Yours – The Secrets to Maxing Out Your Social Security Benefits (a NY Times Best Seller with Phil Moeller and Paul Solman), The Economic Consequences of the Vickers Commission, The Clash of Generations (with Scott Burns), Jimmy Stewart Is Dead, and Spend ‘Til the End. Follow me on twitter @kotlikoff, Circle me on Google , check out my website, kotlikoff.net, and ask me Social Security questions by clicking Ask Larry at the bottom of http://www.maximizemysocialsecurity.com.

Source: Will The Stock Market Drop By Half?

 

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Coronavirus Live Updates: As Lockdowns Expand, Global Markets Plummet

Markets in Asia and the Middle East opened sharply lower on Monday as investors digested the relentless global spread of the coronavirus and turmoil in the oil markets. Shares in Saudi Aramco, the state oil giant, dropped 10 percent leading to a halt in trading on the Riyadh stock market.

Asian markets opened sharply lower on Monday as investors digested the relentless global spread of the coronavirus and turmoil in the oil markets.Tokyo was down 4.7 percent at midmorning on Monday, while Hong Kong was down 4.1 percent. Futures markets showed investors predicting sharp drops in Wall Street and Europe as well.

The coronavirus has unnerved investors as it spreads, clouding the prospects for global growth. Italy on Sunday put a broad swath of its industrial northern region under lockdown as the virus has spread, making it one of the biggest sources of confirmed infections outside China. France, Saudi Arabia, Iran and other countries also took further steps to stop the spread.

In the United States, the number of confirmed infections exceeded 500 cases. A top American expert said on Sunday that regional lockdowns could be necessary.A clash over oil between Russia and Saudi Arabia, two major producers, further unnerved investors. As the coronavirus hits demand for fuel, Saudi Arabia slashed its export oil prices over the weekend, starting an apparent price war aimed at Russia.

Lower oil prices could help consumers, but it could unsettle countries that depend on oil revenue to prop up their economies. In futures markets, the benchmark price for American and Europe oil supplies tumbled $10, or about one-quarter.Investors fled to the safety of the bond market, driving yields lower. In the market for U.S. Treasury bonds, yields broadly fell below the 1 percent level for both short term and long term holdings. The 10-year Treasury bond, which is closely watched, was yielding about 0.5 percent.

In other Asian markets, South Korea was down 3.6 percent. Shanghai was down 1.5 percent.

Italy reported a huge jump in deaths from the coronavirus on Sunday, a surge of more than 50 percent from the day before, as it ordered an unprecedented peacetime lockdown of its wealthiest region in a sweeping effort to fight the epidemic. The extraordinary measure restricted movement for a quarter of the country’s population.“We are facing an emergency, a national emergency,” Prime Minister Giuseppe Conte said in announcing the government decree in a news conference after 2 a.m.

The move is tantamount to sacrificing the Italian economy in the short term to save it from the ravages of the virus in the long term. The measures will turn stretches of Italy’s wealthy north — including the economic and cultural capital of Milan and landmark tourist destinations such as Venice — into quarantined red zones until at least April 3.

They will prevent the free movement of roughly 16 million people. Funerals and cultural events are banned. The decree requires that people keep a distance of at least one meter from one another at sporting events, bars, churches and supermarkets. The Italian outbreak — the worst outside Asia — has inflicted serious damage on one of Europe’s most fragile economies and prompted the closing of Italy’s schools. The country’s cases nearly tripled from about 2,500 infections on Wednesday to more than 7,375 on Sunday. Deaths rose to 366.

More and more countries have adopted or are considering stronger measures to try to keep infected people from entering and to contain outbreaks. More and more countries have adopted or are considering stronger measures to try to keep infected people from entering and to contain outbreaks.

On Sunday, Saudi Arabia cut off access to Shiite Muslim towns and villages in the east of the kingdom, cordoning off an area in Qatif Governorate where all 11 of the country’s confirmed coronavirus cases have been identified. And local Saudi media reported that the country would temporarily close down all educational institutions and block travel to and from a number of countries in the region. The kingdom had already suspended pilgrimages to the Muslim holy cities of Mecca and Medina.

In Iran, which has been hit the hardest in the Middle East, state media reported that all flights to Europe would be suspended indefinitely. The health minister in France, one of Europe’s bigger trouble spots, announced a ban on gatherings of more than 1,000 people. The U.S. has counted at least 539 cases across 34 states — Connecticut reported its first case and Washington announced another patient being treated for coronavirus had died on Sunday — and the District of Columbia, and logged 22 deaths. Washington State, New York, California, Maryland and Oregon have declared emergencies.

A growing number of schools are shutting down across the country, raising concerns about the closings will affect learning, burden families and upend communities. The U.S. Army suspended travel to and from Italy and South Korea, now the world’s third largest hot spot, until May 6, an order that affects 4,500 soldiers and family members. And the Finnish armed forces announced that troop exercises planned for March 9-19 with Norway would be scrapped.

On Sunday, the leading U.S. expert on infectious diseases, Dr. Anthony S. Fauci, said that it was possible that regional lockdowns could become necessary and recommended that those at greatest risk — the elderly and those with underlying health conditions — abstain from travel. Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases, said the Trump administration was prepared to “take whatever action is appropriate” to contain the outbreak, including travel restrictions in areas with a high number of cases.

“I don’t think it would be as draconian as ‘nobody in and nobody out,’” Dr. Fauci said on “Fox News Sunday.” “But there’ll be, if we continue to get cases like this, particularly at the community level, there will be what we call mitigation.”

Even as the rate of new infections appeared to taper in China, the number of cases around the world continued to rise on Sunday, with some of the biggest clusters emerging in Europe. Besides the sharp rise in Italy, Germany reported more than 930 cases; Switzerland’s total reached 281; and Britain’s health department said that three people with the virus had died and that the number of cases in the country had jumped to 273 by Sunday. The smallest E.U. nation, Malta, reported its first confirmed case on Saturday: a 12-year-old girl recently returned from a vacation in northern Italy. Her condition was described as good.

The Spanish authorities announced on Sunday that three more people diagnosed with coronavirus had died in Madrid, raising the number of coronavirus fatalities in the country to 13. There are now over 500 cases, the authorities said. Salvador Illa, Spain’s health minister, said at a news conference in Madrid that several cases in Spain were linked to people who recently traveled to Italy.

Source: Coronavirus Live Updates: As Lockdowns Expand, Global Markets Plummet

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Invesco Global Market Strategist Brian Levitt and Brown Brothers Harriman Chief Investment Strategist Scott Clemons joins Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Jared Blikre to discuss the latest market trends on The First Trade. #coronavirus #markets #stocks Subscribe to Yahoo Finance: https://yhoo.it/2fGu5Bb About Yahoo Finance: At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Connect with Yahoo Finance: Get the latest news: https://yhoo.it/2fGu5Bb Find Yahoo Finance on Facebook: http://bit.ly/2A9u5Zq Follow Yahoo Finance on Twitter: http://bit.ly/2LMgloP Follow Yahoo Finance on Instagram: http://bit.ly/2LOpNYz

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