Written by rjs, MarketWatch 666

The news posted last week about economic affects related to the Wuhan coronavirus, 6019-19, has been surveyed and some articles are summarized here. Although it is obvious that there will be some economic impact in China, the extent is not yet clear. (Picture below is an empty street in Beijing from The South China Morning Post 19 February.) Articles related to the U.S. political and economic impacts are first, followed by global news, with an emphasis on China. News items about epidemiology and other medical news for the virus are reported in a companion article.

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Coronavirus, Market Expectations, and the Fed – By Friday, February 28, 2020, we had seven consecutive down market days and the market had fallen into correction territory with an approximately cumulative 11.5% drop as the global economic impact of the coronavirus infection starting to sink in and the fears of a potential global pandemic. As of Wednesday morning, the 26th, economists could see no data reason for the Fed to act. By the morning of Thursday the 27th, economists were acknowledging the short run economic impact of the coronavirus infection but stating the obvious reality that the data was not present to indicate how long or how deep. On Thursday the Dow fell 1190.95 points, after a Presidential televised message/presentation the night before raised many doubts as the competence of governmental leadership. The need for the Fed to make a statement was necessary and Chairman Powell appropriately did so indicating the Fed stood ready to act in response to the evolving risks when appropriate. By Friday morning, this had caused the economist Tim Duy to change his assessment from an appropriate wait for economic data to the need for a 25 to 50 basis point cut in the Fed funds rate and Goldman Sachs seeing stagnant earnings growth for U.S. companies through 2020 and three 25 basis points rate cuts from March to June of a total 75 basis points and Wall Street expecting at least 50 basis points in March. By the morning of Monday, March 2, Goldman Sachs aggressively stated there needed to be a 50 basis points cur in March and at least 100 basis points this year. Marc Chandler, a forex and macro analyst, was accurately reporting the negative economic data and commenting that central banks words of assurance have a short life. Tim Duy wasconcluding the Fed would need to cut 25 basis points in March with a tilt towards 50 basis points and sooner, although the Fed’s initial response might be to expand repo operations. In this same Monday morning, another economist was commenting that central banks are already doing enough for now and that the emphasis in combating a potential pandemic is appropriately directed fiscal spending by government to support the public health system and provide direct (not tax cuts which would come to late and often to the “special” people who do not need them) stimulus to economy as the global impact on the United States becomes more obvious. As of this Monday the CDC has yet to deliver accurate testing kits to state, county, and local public health agencies and hospitals to provide timely testing. By this Monday afternoon, general doubts were beginning to be raised that, while the market expects rate cuts, cuts will not work and that the Fed is more likely to cut rates due to a demand shock leading to inflation rather than a recession. However, a demand shock can also be a supply shock and lead to recession. By market end this Monday, March 2nd, the Dow finished up 1293.96 or 5.09%, despite European markets being up then turning down (except for UK) on coronavirus concerns. Hope springs eternal in the market however fleeting the moment may be.

Federal Reserve Cuts Interest Rates by Half Percentage Point – WSJ – The Federal Reserve cut its benchmark rate by a half percentage point on Tuesday morning, delivering a booster shot to stem potential economic disruptions from thespreading coronavirus epidemic.Tuesday’s cut, which lowered the federal-funds rate to a range between 1% and 1.25%, is the first to occur in between a scheduled policy meeting since the 2008 financial crisis.The action was approved unanimously. In a statement, the central bank also held out the prospect for further stimulus. “The committee is closely monitoring developments and their implications for the economic outlook and will use its tools and act as appropriate to support the economy,” the statement said. The Fed’s response shows how policy makers are bracing for greater economic distress from a contagious, flulike virus than seemed possible just a week ago. The epidemic roiled global financial markets last week amid signs containment efforts were jeopardized by new clusters in Italy, Iran and South Korea. Stocks posted their largest weekly losses since the 2008 financial crisis. Commodity prices tumbled, signaling a hit to global demand, and long-term U.S. government bond yields reached new records, reflecting lower growth expectations and investors seeking havens.For the Fed, the spread of infections in U.S. over the week raised the prospect of changes to social behaviors that could lead to a drop in consumer spending, especially travel, tourism and entertainment. While this shock isn’t primarily economic in origin, Fed officials recognized it would hit U.S. growth, especially if steps to mitigate the spread of the virus-school and business closures, canceled public events and social behavior broadly speaking-curtailed consumption. Even if the shock is temporary, there are big unknowns over how long it will last and how deep output might decline. While an interest-rate cut won’t address the cause of the downturn, it could soften collateral damage to spending and confidence, stem financial-market disruptions and speed a recovery once any epidemic is under control. Michael Feroli, chief U.S. economist at JPMorgan Chase, said Monday he now saw a 50% chance the Fed was forced to cut rates this year to zero, up from a 33% chance last week. Economists at Goldman Sachs see the U.S. avoiding a recession for now but have downgraded the U.S. growth forecast to an annualized rate of 0.9% in the first quarter and 0% in the second quarter.Fed officials repeatedly said last year it would be important to act aggressively at the first sign of a downturn in spending or hiring because they have less room to counteract a recession by cutting rates. Fed officials have said they would be especially sensitive to signs that financial-market conditions have led to reduced credit availability, and new corporate debt issuance has ground to a halt since last week’s market volatility. The Fed’s rate cuts could be important for global growth, too, because with rates at negative levels in Europe and Japan, foreign central bankers have fewer tools to spur growth in their economies.

Fed makes emergency rate cut amid heightened coronavirus fears– The Federal Reserve has voted unanimously to cut the interest rate 50 basis points to between 1%-1.25% effective March 4, in light of recent pressure on the markets from increased fears about the spread of the novel coronavirus. The Federal Open Market Committee authorized the Federal Reserve Bank of New York to “undertake open market operations as necessary” to maintain the federal funds rate in the target range of 1% to 1.25% and to continue repo operations until at least through April. As more coronavirus cases were discovered last week in the U.S., all three stock indexes fell into correction territory and the Dow logged its worst week since 2008. Yet the Dow was up roughly 2% as of Monday afternoon. The market drop last week, the worst since 2008, came amid concerns about supply chain disruptions, reduced demand and stalled growth related to the emerging COVID-19 outbreak. The Dow Jones industrial average dropped nearly 12% last week before rebounding Monday. Markets were starting to drop again Tuesday morning before the Fed’s announcement.Fed Chairman Jerome Powell on Friday indicated that the agency might attempt to shore up flailing markets with an interest rate cut, though it is highly unusual for the Fed to make changes to the federal funds rate outside of its regularly scheduled meetings. The last emergency Fed action was in 2008 in response to the deepening financial crisis. Tuesday’s action was also the first Fed rate change of more than 25 basis points since the financial crisis.Some analysts have suggested that markets should not look to the Fed to shore up markets because the coronavirus outbreak relates to public health rather than market confidence.Other industry groups, such as the Bank Policy Institute, have argued that in addition to cutting the federal funds rate, the Fed should take additional actions, including reducing banks’ required reserve levels to zero and reduce the premium for access to its discount window.

Coronavirus financial collapse: “Central banks can’t come up with vaccines” – In a global society optimized for finance, it is easy to believe that finance holds the answer to all problems. In 2008 as shipping slowed to a crawl in the wake of the financial crash, sellers of the merchandise on board those ships became increasingly reticent about accepting letters of credit from wobbly banks as payment guarantees from buyers. And, banks were increasingly hesitant to provide other forms of trade credit to buyers. The solution-as for so many other problems that year-was government financial guarantees for banks, depositors and various other financial institutions. That’s because when the essence of the problem was financial, a financial response could work. Today, it is the coronavirus which menaces the world economy-and the people who contract the virus, of course. Much of the Chinese economy-China has been the epicenter of the epidemic-has now been shut down in an effort to halt the spread of the infection which is believed to kill around 2 percent of those who get it. But as anyone reading headlines knows, coronavirus has now landed on every continent. For weeks the world’s stock market investors ignored the increasing alarm bells about the toll the virus was taking on economic activity. Finally, those investors acted en mass last week to dump stocks. No one is calling it a crash yet. “Correction” is a much nicer word. The belated realization among those investors seems to be that here finally is a problem that central banks and governments can’t solve with more easy credit and more spending. As one central banker reminded us: “Central banks can’t come up with vaccines.” Coronoviruses simply don’t care about “central bank liquidity” and “government stimulus.” They only care about finding the next host in order to survive and replicate. And, if that host is a human with a job, he or she may not be going to work-or worse yet, that human may be one of those who never develops symptoms, but still transmits the disease to countless others. With so many people staying home these days in China and factories closed, the countless items which those factories normally make aren’t being shipped to customers across the globe. If those customers are manufacturers using just-in-time inventory systems, they may soon by shutting down for lack of crucial components. That’s just the beginning of a cascade through the entire manufacturing sector as each link is stopped in its tracks for lack of essential parts. If we humans become increasingly afraid to go out for fear of being exposed at the big box store or the restaurant or the movie theater, we will consume only necessities.

Powell and Mnuchin will lead G-7 emergency call on the coronavirus Tuesday – Global financial ministers and central bankers will hold a conference call on Tuesday to coordinate the financial and economic response to the coronavirus. The teleconference call will be led by Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jerome Powell on Tuesday at 7 a.m ET, CNBC’s Steve Liesman reported. Representatives of the Group of Seven industrialized nations will attend the call.It will be a “coordinating call” for the financial and economic response to virus, according to a source.A communique is scheduled for after the call, CNBC has learned.Stocks rallied sharply on Monday on hopes that global central banks will take action soon to offset any impact from the deadly coronavirus, which has spread into the U.S. The Dow Jones Industrial Average posted its biggest gain since March 2009, jumping 5.1%. The 10-year Treasury yield hit a record of 1.03%.

Mnuchin Ready to Work With Congress on Emergency Funding Package – WSJ -Treasury Secretary Steven Mnuchin said the administration looked forward to an emergency funding package from Congress to deal with the spreading coronavirus and signaled it is prepared to ask for more as authorities in the U.S. and around the world race to mitigate the economic impact of the epidemic.”We stand ready to work closely with Congress on an emergency funding package and any other related issues,” Mr. Mnuchin told lawmakers on Tuesday. He also suggested the administration would consider an infrastructure package as part of a broader stimulus measure, if one is needed to shore up growth.Mr. Mnuchin said officials also had begun to consider measures to support businesses facing disruptions related to the virus, as well as workers who may not have paid sick leave. “We’re looking at all different types of options on the table to address all these issues,” he said. “As we come back later with recommendations we will work with Congress.” Lawmakers are working through final issues this week on an emergency funding package for fighting the coronavirus that is expected to cost $7 billion to $8 billion. Partisan disagreements over how to price an eventual vaccine have delayed the release of an agreement, as Democrats push for the package to include funding for the government to purchase vaccines and therapeutics at an affordable price to then make available to the public. An agreement could come as soon as late Tuesday. The Trump administration’s proposal last week to spend $2.5 billion – with $1.25 billion in new funds and $1.25 billion in repurposed funds – was seen by lawmakers as too low. President Trump has said he would accept any amount Congress approves. Mr. Mnuchin also said U.S. officials are working to distribute close to a million coronavirus test kits in the country, which he said should be available very quickly. Mr. Mnuchin spoke after finance ministers and central bank governors from the Group of Seven countries said they stand ready to cooperate on actions, including fiscal stimulus measures, to guard against economic risks from Covid-19 “Given the potential impacts of Covid-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks,” the group said Tuesday following a morning conference call. The statement stopped short of stating specific actions countries might take in response to the virus.

U.S. Weighs Paying Hospitals for Treating Uninsured Coronavirus Patients – WSJ -The Trump administration is considering using a national disaster program to pay hospitals and doctors for their care of uninsured people infected with the new coronavirus as concerns rise over costs of treating some of the 27 million Americans without health coverage, a person familiar with the conversations said.In natural disasters such as hurricanes, hospitals and medical facilities can be reimbursed under a federal program that pays them about 110% of Medicare rates for treating patients such as those evacuated from hard-hit areas.The Centers for Medicare and Medicaid Services has been in discussions about using that program to pay providers who treat uninsured patients with coronavirus, the person said. Dr. Robert Kadlec, who is the assistant secretary for preparedness and response at the Department of Health and Human Services, also said Tuesday at a congressional hearing that discussions are being held about using the National Disaster Medical System reimbursement program. In 2018, 8.5% of people, or 27.5 million, didn’t have insurance at any point during the year. It was an increase from 2017, when 7.9% of the population, or 25.6 million, were uninsured, according to the U.S. Census Bureau. For public health officials, strategies to contain the novel coronavirus inside the U.S. will likely shift as the number of new cases and deaths increase. WSJ’s Brianna Abbott explains several challenges the country faces. Photo: David Ryder/ReutersAbout 2% of people infected with coronavirus have died and about 5% have developed serious infections that may require oxygen therapy or ventilators, based on research on cases in China.In the U.S., there are more than 100 coronavirus cases. Anne Schuchat, principal deputy director of the U.S. Centers for Disease Control and Prevention, said at the congressional hearing Tuesday that “we are seeing community transmission in a few places.”

Coronavirus Spending Bill Could Be Used to Cement Spying Authorities – THE CONGRESSIONAL EFFORT to rein in the government’s surveillance powers before a looming deadline on March 15 could run up against a new opponent: the coronavirus. House Democrats have been working on plans to further amend a provision of the Patriot Act, which as of 2015 provides a way for the government to get American citizens’ phone records from telecom companies. This and other key provisions of the Patriot Act must be reauthorized by March 15, or the surveillance authority lapses. The Democrats’ amended bill would pull the provision’s authorization while allowing and tweaking other other ways the government collects records. But those negotiations have been thrown off track, with critics of the spying program alarmed by the possibility that congressional leaders may try to use the coronavirus outbreak – and the coinciding legislation to fund a response – as a vehicle to muscle through an unamended extension or reauthorization. Join Our Newsletter Original reporting. Fearless journalism. Delivered to you. I’m in The Trump administration’s request for $2.5 billion to mitigate the coronavirus pandemic is likely to become an unstoppable legislative vehicle – as must-pass legislation that congressional leaders of both parties could use to ram through a reauthorization of the FBI’s call detail records program. Such a move would sidestep the House’s reform effort and instead push through a clean reauthorization of the program. The Senate, said a Democrat on the House Judiciary Committee, is “threatening to put that clean reauthorization into something like coronavirus funding which would make it impossible to defeat if we don’t come up with a bill here. Pelosi and Schiff will never allow it to expire.” “I would say it is still chatter at this point. But it is also chatter that could become their Plan A,” a Senate Republican aide, who requested anonymity because they are not authorized to speak on the matter, told The Intercept.

House Passes $8.3 Billion Bill to Battle Coronavirus – WSJ The House passed a roughly $8.3 billion emergency spending package for combating the coronavirus outbreak, sending the legislation to the Senate as lawmakers raced to respond to the quickly spreading outbreak. The bill provides more than $3 billion for developing treatments for the virus and allocates $2.2 billion for the Centers for Disease Control and Prevention to contain the outbreak, among other measures. Under the legislation, which the Senate will also likely pass this week, more than $1 billion will go overseas, while $20 million will be made available to fund administrative expenses for loans to U.S. small businesses.The legislation, crafted by top Republicans and Democrats, caps less than two weeks of negotiations that began when the White House said it planned to spend roughly $2.5 billion on fighting the virus, an amount lawmakers said was too low. It passed the House overwhelmingly, with just two Republicans voting against it and 415 members supporting it. President Trump has said he would sign whatever package Congress approves. Negotiations had slowed in recent days as lawmakers haggled over the possible price of a coronavirus vaccine in development. Democrats had pushed to guarantee that the drug would be made available at an affordable price, while Republicans warned that price controls could slow development. The final deal includes $300 million for the government to purchase the vaccine and other therapeutics and make them available to the public It calls on Health and Human Services Secretary Alex Azar to use currently available authority to ensure the price is “affordable in the commercial market,” while additionally stating that he shouldn’t delay the drug’s development.

Senate passes $8.3 billion coronavirus bill, sending it to Trump — The Senate on Thursday easily passed more than $8 billion in funding to fight the coronavirus, sending the measure to President Trump, who is expected to sign it. Senators voted 96-1 on the bill, which was finalized and cleared the House the day before. The bill provides $7.76 billion to agencies combating the coronavirus. It also authorizes another $500 million in waivers for Medicare telehealth restrictions, bringing the total figure greenlighted under the bill up to $8.3 billion. Included within that is $2.2 billion to help federal, state and local public health agencies prepare for and respond to the coronavirus, including funds for lab testing, infection control and tracing individuals who might have had contact with infected people. The Senate’s passage caps off a weeks-long sprint to get emergency funding through Congress amid growing concerns about a widespread outbreak within the United States. There have been 99 U.S. cases spread among 13 states, and 10 people have died, according to the Centers for Disease Control and Prevention (CDC). The Trump administration sent its emergency request to Congress on Feb. 24, less than two weeks ago. The initial $2.5 billion amount, only half of which would have been new funding, was criticized by Democrats and some Republicans as being too low. By late last week, the bipartisan group negotiating the deal were looking at between $6 billion and $8 billion, sources told The Hill. By Monday that had climbed to $7.5 billon, and the final figure ended up being slightly higher. But talks appeared stuck as late as Wednesday morning over the issue of vaccine affordability. Democrats had pushed for language in the bill that would require any coronavirus vaccines or treatments developed by private companies with federal funding to be priced affordably. But Republicans had argued that could discourage drug companies from investing in potential cures and vaccines. A source told The Hill that there was also discussion at a leadership level about ensuring Medicare would fully cover copay for a vaccine, but the idea was rejected by Republicans. Government health care experts have said a vaccine is a year to 18 months away. The bill does state that the Health and Human Services secretary “may” take measures to assure those products are affordable.

U.S. Hospitals Are Unprepared for Coronavirus, Nurses Warn While Trump Cries ‘Hoax’ – While stipulating that a University of California at Davis medical facility is “generally better prepared and equipped” than most when it comes to dealing with such a situation, National Nurses United – the largest nurses union in the U.S. – warned Friday night that the self-quarantine of 124 healthcare workers there shows the nation’s hospitals remain seriously unprepared for the coronavirus that officials warn is rapidly spreading. According to the NNU, a single case of coronavirus (also known as COVID-19) – in which a patient was admitted on Feb. 19 – has now resulted in the quarantine of 36 registered nurses and 88 other health care workers at the UC Davis Medical Center, all them now at home in order to limit the risk of further spread. “These 124 nurses and health care workers, who are needed now more than ever, have instead been sidelined,” the union said in a statement. “Lack of preparedness will create an unsustainable national health care staffing crisis. Nurses view the handling of this COVID-19 case as a system failure and not a success.” The Washington Post reported Saturday, citing latest figures from the Centers for Disease Control and Prevention, that “four new cases Friday brings the total number of covid-19 cases detected through the U.S. public health system to 19.” The NNU said its nurses are speaking out now because they are “dedicated to protecting the health and safety of their patients, health care workers, and the public.” It also comes as President Donald Trump, at a rally in South Carolina on Friday night, accused Democrats and others criticizing his administration’s handling of the crisis – of which there are many – of perpetrating a “new hoax” against him. While it is waiting for more complete results of a survey sent out to nurses in hospitals across the country, the NNU said preliminary responses from 1,000 members in California found:

• Only 27 percent report that there is a plan in place to isolate a patient with a possible novel coronavirus infection. 47 percent report they don’t know if there is a plan.
• Only 73 percent report that they have access to N95 respirators on their units; 47 percent report access to powered air-purifying respirators (PAPRs) on their units.
• Only 27 percent report that their employer has sufficient personal protective equipment (PPE) stock on hand to protect staff if there is a rapid surge in patients with possible coronavirus infections; 44 percent don’t know.

CDC blocked FDA official from premises – In a sign of growing tension among the Trump administration’s health agencies, officials are expressing frustration that a top scientist was initially rebuffed when attempting to visit the CDC in Atlanta last month to help coordinate the government’s stalled coronavirus testing, two individuals with knowledge of the episode told POLITICO. Timothy Stenzel, who is the director of the Food and Drug Administration’s Office of In Vitro Diagnostics and Radiological Health, was made to wait overnight on the weekend of Feb. 22 – as senior health department officials negotiated his access in a series of calls – before Centers for Disease Control granted him permission to be on campus. Stenzel’s visit had been expected, the individuals said. The FDA had dispatched Stenzel to the CDC in an effort to expedite the development of lab tests for the novel coronavirus outbreak. Problems with the CDC-developed test delayed the Trump administration’s plan to expand screening for weeks, POLITICO first reported on Feb. 20. A senior HHS official confirmed the episode.”On Saturday, February 22, at about 7 p.m., an FDA employee arrived at CDC Roybal campus in Atlanta, a day before what CDC understood to be his scheduled arrival time. Due to CDC security requirements, he was not allowed on campus that night,” the spokesperson said. “On Sunday morning, February 23, as scheduled, CDC staff met the FDA employee and escorted him on campus, in full compliance with standard security processes required for all individuals whether they are federal employees or other visitors.” Stenzel later found evidence of lab contamination, which he reported to HHS officials and may have contributed to the coronavirus lab-test delays and other problems. The CDC had spent days reassuring HHS leaders that the lab tests were imminent, even as delays prevented their delivery. The delays prevented many Americans, who didn’t fit the CDC’s strict criteria, from being tested for coronavirus. CDC initially limited testing to people who had recently traveled to China or had close contact with a confirmed case and were also symptomatic.

Trump attempts to blame Obama for coronavirus test kit shortage – Donald Trump sought to shift blame on to the Obama administration for a nationwide coronavirus test kit shortage. Elizabeth Warren speaks after quitting 2020 race: ‘I have no regrets’ – live Read more The president on Wednesday blamed a federal agency decision during Barack Obama’s presidency, which Trump said made it harder to quickly roll out testing for the virus. “The Obama administration made a decision on testing that turned out to be very detrimental to what we’re doing, and we undid that decision a few days ago so that the testing can take place in a much more accurate and rapid fashion,” he told reporters during a White House meeting with airline executives, whom he had called to discuss the economic effects of the outbreak. “That was a decision we disagreed with,” he said. “I don’t think we would have made it, but for some reason, it was made.” It was unclear what decision Trump was referring to. Robert Redfield, the director of the Centers for Disease Control and Prevention (CDC), said private laboratories used to be able to develop clinical tests but “in the previous administration that became regulated. For someone to do that they had to file with the FDA”, Redfield said. But experts on lab testing have said they are unaware of an Obama administration rule that would have hindered the use of tests developed at university or private labs in an emergency. The responsibility for the coronavirus test kit shortage appears to lie with the CDC’s choice to develop and distribute its own kit rather than use the one recommended by the World Health Organization, according to ProPublica. But the CDC’s tests didn’t work, falsely flagging harmless samples that contained viruses other than Covid-19. Moreover, Trump ordered the dissolution of the National Security Council’s global health security unit and reassigned its head. The former national security adviser John Bolton also pressured the team’s counterpart at the Department of Homeland Security to resign.

How Lack Of A Strategy Undermines The Coronavirus Response – Handling a natural calamity is a pivotal test of leadership. Conventional wisdom states that leaders need crisp, clear, accurate communications, combined with reliance on science and agile institutional action. As in other areas, the Trump administration is pursuing an unconventional approach to the 2020 coronavirus crisis (technically “Covid-19”), with three mutually incompatible communication strategies that risk undermining each other. In one channel, President Trump and his surrogates, including Mick Mulvaney,Donald Trump Jr and Rush Limbaugh, continue to describe the virus as a hoax, make misstatements about the disease and its risks, falsely accuse political opponents of wanting the disease to spread, exaggerate any temporary success, dismiss future problems, ignore science and epidemiology, while claiming that the president is under-appreciated through political unwillingness to recognize his continuing success. Meanwhile in a second channel, Vice President Pence has been named as the chair of the 2020 coronavirus task force and designated as the official spokesperson to issue bland sanitized quasi-scientific statements that seem intended to spray a calming haze over everything. In the third channel, a certain amount of access is provided to real expertise from epidemiologists and scientists, who sometimes contradict misstatements in the other channels, even during a press conference with the president. While the three-track strategy is unconventional, the question remains whether President Trump, who has successfully broken almost every other norm of leadership, might succeed here too. It is possible that Trump will defy the odds and once again come up lucky. It is also possible that, as in some earlier pandemics, the 2020 coronavirus will rise up and exact its revenge. No one knows what will happen. But the three-track strategy presents some obvious risks. These risks have materialized very rapidly. In just two months, it has spread to around 100,000 cases in over 60 countries.

Coronavirus and the Terrifying Muzzling of Public Health Experts –Union Of Concerned Scientists – The Trump administration is scrambling to reconcile the president’s contradictions of statements made by federal health scientists about the emerging coronavirus crisis. Their solution: muzzle scientists, require that all statements be politically vetted through Vice President Pence, and punish federal employees who draw attention to gross negligence. This is a highly dangerous power grab that undermines both emergency response and public faith in the reliability of information coming out of the government. And it speaks to the incompetence and incoherence of the response to this crisis so far.It’s hard to keep track of the number of Trump appointees who should know basic facts about the coronavirus but don’t. Then yesterday, we learned that the actual public health experts in government would no longer be allowed to speak publicly about the outbreak without the vice president’s blessing. CDC already has a 65-page manual for communicating complex scientific information to the public in times of crisis. “Clearance” by the White House will not improve this function. As chronicled by UCS’s Anita Desikan, previous Trump administration actions have already compromised government response. The State Department overruled objections by CDC scientists and allowed 14 people who tested positive for the virus to fly together with non-infected people. Global disease surveillance systems were weakened. Initiatives to better understand viruses in animals were shuttered. And National Security Council global health security experts were pushed out the door. We already know that this White House prioritizes the president’s ego over giving the public the information it needs. Remember Sharpiegate? The president erroneously claimed that Hurricane Dorian would hit Alabama. The professional civil service staff at the National Weather Service clarified that the state was not in the path of the storm. That’s their job. Rather than admit a mistake, White House chief of staff Mick Mulvaney ordered the acting NOAA administrator to repudiate the experts and prevent other scientists from talking about the path of the storm. During the hurricane. Under termination threats, NOAA political appointees buckled, telling professional staff that the even when public safety is concerned, the president is always right.

As CDC Says ‘Do Not Go to Work,’ Trump Says Thousands With Coronavirus Could Go to Work and Get Better – Running roughshod over the advice of trained medical professionals and the Centers for Disease Control and Prevention, President Donald Trump Wednesday night suggested to millions of Fox News viewers that people infected with coronavirus could still go to work and recover, comments that were immediately condemned as irresponsible and dangerous.”A lot of people will have this and it’s very mild. They’ll get better very rapidly,” Trump told Fox’s Sean Hannity. “They don’t even see a doctor, they don’t even call a doctor. You never hear about those people.””So you can’t put them down in the category of the overall population in terms of this corona flu and/or virus,” Trump continued. “So you just can’t do that. So, if, you know, we have thousands or hundreds of thousands of people that get better just by, you know, sitting around and even going to work. Some of them go to work, but they get better.”The CDC has advised that anyone exhibiting symptoms of coronavirus such as a fever, coughing, and/or shortness of breath stay home from work, avoid public areas as much as possible, and seek medical attention.”You should restrict activities outside your home, except for getting medical care,” the CDC’s website states. “Do not go to work, school, or public areas. Avoid using public transportation, ride-sharing, or taxis.” Trump also claimed in the interview with Hannity that the World Health Organization’s (WHO) estimate of a 3.4% global death rate from coronavirus is a “false number.”

The emperor has no clue: Trump’s conviction that the coronavirus threat will vanish has warped the government response A compelling and coherent narrative is finally emerging to explain the Trump administration’s flailing response to the coronavirus crisis.It’s consistent with what we know about Trump’s pathological need for admiration, and with what we know about the culture of sycophancy and fear he has created among the people who answer to him.And it should become an explicit element of every incremental story about the crisis going forward.In short: Trump bet on containment rather than mobilization. It was a bad bet. But in Trump’s mind, it was a “tremendous success”. As a result, top health officials fearful of his wrath assured him it was working, rather than preparing for its inevitable failure. Now, Trump is fully invested in making coronavirus disappear, even while it continues its spread. But the only way to do that is to slow-walk testing, put a chokehold on the release of information, repeatedly insist that everyone says he’s doing a good job, and hope for a miracle.Where we are now is the result of Trump’s bad judgement, compounded by extreme, obsessive vanity – and an executive-branch culture in which officials are too terrified to contradict him. And make no mistake: his subordinates remain under clear orders to make it all go away. As he put itlast week: “We have done an incredible job. We’re going to continue. It’s going to disappear. One day – it’s like a miracle – it will disappear.”

Trump calls WHO’s global death rate from coronavirus ‘a false number’ – Donald Trump declared live on television on Wednesday night that he did not believe the World Health Organization’s assessment of the global death rate from coronavirus of 3.4%. “I think the 3.4% is really a false number,” he told Sean Hannity, one of his favorite conservative Fox News hosts, in a phone interview broadcast live.”Now, this is just my hunch,” Trump began, before continuing that “based on a lot of conversations with a lot of people that do this, because a lot of people will have this, and it’s very mild – they’ll get better very rapidly, they don’t even see a doctor, they don’t even call a doctor.”He went on: “You never hear about those people, so you can’t put them down in the category of the overall population, in terms of this corona flu, and/or virus. So you just can’t do that.” He then plucked his own surmising of a likely death rate out of the air. “You know, all of a sudden it seems like 3 or 4%, which is a very high number, as opposed to a fraction of 1%,” he said, perhaps referring to the typical death rate for influenza, which is well below 1%.Trump said: “But again, they don’t know about the easy cases because the easy cases don’t go to the hospital. They don’t report to doctors or the hospital in many cases. So I think that that number is very high. I think the number, personally, I would say the number is way under 1%.” Sources at the WHO pointed out to the Guardian that the 3.4% figure represented no more than a snapshot of the total number of reported deaths over the number of reported cases on the given day. “It’s not a mortality rate. But it is the math. The calculation on the given day.”

Iran Blasts US Offer To Help Fight Coronavirus As Political-Psychological Game -Washington momentarily put aside the fact that it’s essentially at war with Iran and in a very rare moment actually offered to “help” Iran combat the rapidly spreading and deadly coronavirus according to Secretary of State Mike Pompeo’s testimony before the House Foreign Affairs Committee on Friday.”We have made offers to the Islamic Republic of Iran to help, and we’ve made it clear to others around the world and in the region that assistance, humanitarian assistance to push back against the coronavirus in Iran is something the United States of America fully supports,” Pompeo said.Pompeo clarified after the hearing to reporters that the offer of support was made “to the Iranian people” and “formally conveyed to Iran through the government of Switzerland,” The Hill reported.Despite Iran’s official death toll now standing at multiple dozens, rising to 43 as of Saturday morning, with a total number of infected at 593 (though the true numbers of infected are believed to be in the thousands or possibly tens of thousands), the Islamic Republic’s leaders promptly mocked Pompeo’s claim to have extended a hand of “support”. Iran’s foreign ministry spokesman Abbas Mousav on Friday slammed America’s offer as “ridiculous,” according to the Mehr news agency. Meanwhile, a number of reports have analyzed the impact of US sanctions on Iran’s coronavirus crisis – the hardest hit country outside of China – and concluded the US administration’s punitive attempt to devastate the Iranian economy is a contributing factor to Covid-19’s rapid spread there. The National Interest reported that the White House has responded to this criticism by opening up humanitarian avenues.

2 Individuals At AIPAC Conference With Pence, Pompeo, McConnell & Others Test Positive For Covid-19 – As the novel coronavirus spreads through Westchester County’s Jewish community following an outbreak in New Rochelle, it’s perhaps unsurprising that several individuals who attended the 2020 AIPAC conference, which was held in Washington DC earlier this week, have tested positive for the virus. The incident is rapidly becoming a lesson in just how difficult it is to keep VIPs – including even senior leaders in our government – away from the virus. In a statement released Friday evening, the organizers of the conference confirmed that two attendees had tested positive at an event where Vice President Mike Pence was a keynote speaker, and where several other senior administration officials were present. Other high-ranking Republicans in attendance included Secretary of State Mike Pompeo, Senate Majority Leader Mitch McConnell, Senator and former Trump rival Ted Cruz and Rep. Liz Cheney, the daughter of former Vice President Dick Cheney. Read the full statement below: The identities of the infected individuals who attended the conference were not released, as per a new policy governing the identities of those who have been infected. The organization said it notified attendees to consult the CDC’s guidelines for those who may have come into contact with the virus. The guidelines advice individuals to avoid close contact with others, and try to isolate while watching for any symptoms. Should symptoms emerge, individuals are advised to call their doctors and report the situation. Though many have complained that they haven’t been able to access tests despite contacting their doctor because, as the Atlantic revealed earlier, fewer than 2,000 tests have been administered in the US so far due to a dire shortage that administration officials have attempted to underplay. The situation in Iran, where a senior adviser to the Ayatollah was infected, a former ambassador to Syria died, and nearly 2 dozen lawmakers have been infected, offered a lesson in the risks that the virus – which of course can’t be stopped or stunted by traditional weaponry – presents.

CPAC attendee tested positive for coronavirus – One of the attendees at last week’s Conservative Political Action Conference (CPAC) in National Harbor, Maryland, tested positive for coronavirus, the American Conservative Union said in a press release Saturday. President Donald Trump, Vice President Mike Pence and other administration officials attended the conference, though the ACU says the attendee did not come into contact with Trump or Pence. The attendee also did not attend events in the main hall, the release said. The ACU said the Trump Administration “is aware of the situation.” The exposure occurred prior to the conference, the ACU added. “A New Jersey hospital tested the person, and CDC confirmed the positive result. The individual is under the care of medical professionals in the state of New Jersey, and has been quarantined.”

Coronavirus Costs: Who’s Paying for All This? – WSJ –The new coronavirus has arrived. Face masks and hand sanitizers are flying off the shelves, and the number of confirmed cases in the U.S. continues to rise.On Wednesday, Congress agreed to pour roughly $8 billion into the coronavirus response. So far, the epidemic has disrupted supply chains and sent stocks falling, but its greater economic impact remains unknown. The Association of Public Health Laboratories estimates testing of people potentially infected with Covid-19, the respiratory illness caused by the virus, will cost $25 million for the first two months of the public response.Vaccines, sick leave, travel changes all come at a cost, but who is shouldering the bill? The answer is federal agencies, insurance companies, local health departments – and patients. For now, most people with health insurance will likely have the cost of coronavirus testing covered in the way that any other type of care is covered – – including whatever they may owe in co-pays, co-insurance or under a deductible. According to the public-health lab laboratories group, “there is no cost to patients for Covid-19 testing performed by public health laboratories.” Hospitals are administering their own tests and local health departments are stepping in to handle other cases. The Centers for Disease Control and Prevention initially gave test kits to public health departments for free, and 48 labs in 38 states are testing for the virus. While tests given by public health departments may be free, private labs or hospitals are likely to charge. New York Gov. Andrew Cuomo announced earlier this week that New York health insurers would have to waive patients’ out-of-pocket costs associated with testing for the virus, including emergency-room visits. Other states have yet to take similar steps. Even in New York, the order won’t apply to most large employer plans or to Medicare.

‘Why Are We Being Charged?’ Surprise Bills From Coronavirus Testing Spark Calls for Government to Cover All Costs – Public health advocates, experts, and others are demanding that the federal government cover coronavirus testing and all related costs after several reports detailed how Americans in recent weeks have been saddled with exorbitant bills following medical evaluations. Sarah Kliff of the New York Times reported Saturday that Pennsylvania native Frank Wucinski “found a pile of medical bills” totaling $3,918 waiting for him and his three-year-old daughter after they were released from government-mandated quarantine at Marine Corps Air Station in Miramar, California.”My question is why are we being charged for these stays, if they were mandatory and we had no choice in the matter?” asked Wucinski, who was evacuated by the U.S. government last month from Wuhan, China, the epicenter of the coronavirus outbreak.”I assumed it was all being paid for,” Wucinski told the Times. “We didn’t have a choice. When the bills showed up, it was just a pit in my stomach, like, ‘How do I pay for this?'” The Centers for Disease Control and Prevention (CDC) is not billing patients for coronavirus testing, according to Business Insider. “But there are other charges you might have to pay, depending on your insurance plan, or lack thereof,” Business Insidernoted. “A hospital stay in itself could be costly and you would likely have to pay for tests for other viruses or conditions.” Lawrence Gostin, a professor of global health law at Georgetown University, told theTimes that “the most important rule of public health is to gain the cooperation of the population.” “There are legal, moral, and public health reasons not to charge the patients,” Gostin said.

Airlines Balk at U.S. Push for More Traveler Data in Virus Hunt – The Trump administration and U.S. airlines are clashing over how to collect and disseminate contact information for travelers entering the country as the government steps up efforts to track the coronavirus. The dispute spilled into the open this week ahead of a White House meeting Wednesday between Vice President Mike Pence and airline executives. Last month, the Department of Health and Human Services and Centers for Disease Control and Prevention instructed carriers to divulge each traveler’s name, email and U.S. address, plus two telephone numbers. The airlines say they often lack all five pieces of data on their customers — especially for those who purchased tickets abroad or through a third-party, or those who transferred from another airline because of interrupted travel plans. About 26% of passengers don’t have a phone number in their travel record and 44% don’t have an email, according to Airlines for America, a lobbying group. “It’s clear to me that the government is going to require the collection of this information,” Sharon Pinkerton, senior vice president of legislative and regulatory policy at Airlines for America, said Tuesday. “It is not clear to me how they are going to require it.” Representatives of the CDC and the health and human services department didn’t immediately respond to queries seeking comment. Another proposed change for “contact tracing” would be for airlines to ask U.S. citizens returning from abroad for an address when they return to the country. Such a requirement is spurring privacy concerns among U.S. airlines, Pinkerton said. The question is already part of what Customs and Border Protection asks foreign travelers, but no enforcement mechanism exists if the response isn’t truthful. More broadly, the carriers have argued that the government already possesses whatever contact data is available on international travelers, Pinkerton said. That information is from the Department of Homeland Security, which maintains databases of visa applications, other authorization documents and enrollments in “trusted traveler” programs.

Pompeo Blames China For US Outbreak, Says Lack Of Transparency Left Us Behind The Curve — Mike Pompeo was the featured guest on “Squawk Box” Friday morning, and when asked about China’s grandiose claims about the country’s virus-fighting efforts, the Secretary of State accused the Communist Party leaders of deliberately delaying the sharing of data and other information that would have been of “great benefit” to the US during the early days of the outbreak. Though he didn’t offer much in the way of specifics, Pompeo said China’s foot-dragging left the US “behind the curve” as it sought to contain the first signs of an incipient outbreak in January. Working with the Chinese throughout the outbreak has been “incredibly frustrating,” Pompeo said, even as scientists sought to get information “which will ultimately be the solution to both getting the vaccine and attacking this risk.” Over in China, state media is touting the Communist Party’s ‘triumph’ over the virus as areas and cities impose travel bans on foreigners as part of China’s national exercise in gloating. China once slammed the US’s travel restrictions and mandatory screenings and quarantines as “racist”, citing the WHO’s declaration that they weren’t appropriate at the time (Europe followed that advice and look how it turned out: every state on the Continent has confirmed at least one case, except for Slovakia). Now, Chinese news anchors are telling the population that the global community owes a debt of gratitude to China for its “sacrifice” in containing the outbreak (referring to the draconian crackdown instituted by Chinese officials). Apparently, the domestic propaganda channels are overlooking the fact that the virus originated in China and the government’s slow response unleashed the disease on the world.

Coronavirus: Bracing for the Economic Shockwave – Yves Smith – I don’t want to minimize the seriousness of the coronavirus health risks. But on top of that, people who do not become sick or come down with only a mild case may wind up suffering economically due to cuts in hours or job loss or for those who have them, damage to their pensions. The markets are finally taking coronavirus very seriously, with the long bond trading at record highs and stock markets doing synchronized swan dives last week. But unlike the financial crisis, where it was possible to identify the main drivers, housing debt and highly leveraged resecuritizations (CDOs) where the risks wound up concentrated at undercapitalized, systemically important financial institutions, here, many real economy sectors are seriously exposed: energy, travel and hospitality, aircraft manufacturers, automakers, restaurants, casinos. Even though the business press is eared to covering stocks, it is high levels of downgrades and defaults that make for financial crises. Remember that the the dot-bomb era, despite a massive wipeout of equity values, didn’t result in a crisis due to limits on margin lending. But as a result of the measures to move risks out of the banking sector, it may be harder to anticipate where ruptures will occur. The current leading edge conventional wisdom is that we’ll see a massive credit crunch as many companies start looking wobbly as their revenues shrink and investors get nervous about taking lending risk until they see a bottom to the disease and the economic damage. The fact that the Telegraph’s Ambrose Evans-Pritchard is in top form is a bearish sign. In his latest article, he starts by describing Standard & Poors and Moody’s issuing broad-based warnings. Note that S&P and Moody’s are known for not downgrading until bonds are already trading as if they’d been notched down: There are mounting risks of a credit crunch in vulnerable sectors of the corporate bond market, potentially rocking an unstable financial edifice with record levels of debt and set off a dangerous chain reaction … . Moody’s has issued a global recession alert should the coronavirus turn into a global pandemic, deemed inevitable by many of the world’s top virologists after exponential outbreaks in Korea, Iran, Italy, and now France. “The economy was already fragile before the outbreak and vulnerable to anything that did not stick to script. COVID-19 is way off script,” said the rating agency. S&P’s [head of credit research for Europe and the Middle East] Mr [Paul] Watters said sectors with a toxic mix of high leverage and poor cash flow are coming under the microscope. Health care borrowers in the high-yield league are the most stretched with a debt-to-earnings ratio of six times, followed by media on 5.5 times.

Federal Reserve To Quarantine Dollars From Asia On Covid-19 Transmission Concerns – Following reports that Beijing had “quarantined” dirty cash, the Federal Reserve is now doing the same out of fear that dollars in circulation from Asia could contain Covid-19, reported Reuters. A Fed spokesperson told Reuters on Friday that “quarantining physical dollars that it repatriates from Asia before recirculating them in the US financial system” has begun. The new “precautionary measure” is to limit the transmission of the virus in the US. The spokesperson said the Fed regional bank system, with 12 total branches across the country, will help manage money supply coming from Asia and quarantine dollars for upwards of ten days before recirculation. There were no specifics of how the dollars would be sanitized. Bear in mind that even before the Covid-19 outbreaks, a 2014 study by researchers at New York University identified 3,000 types of bacteria on dollar bills due to how widely and frequently they change hands. The World Health Organization (WHO) warned Monday that the virus could survive on banknotes, potentially spreading the virus within communities and across the world. To reduce the risk of being infected by money, the NGO advised citizens in countries struggling with outbreaks to favor digital payments when possible. Past research has found that Covid-19 could live on surfaces for as long as nine days.

Big banks want regulation eased because of coronavirus. Experts call it opportunistic. — The country’s biggest banks are asking federal officials for long-sought regulatory relief as part of the government’s efforts to contain the economic fallout from the coronavirus, requests that experts lambasted as opportunistic and unnecessary. The Bank Policy Institute – a lobbying group for big banks including Bank of America, JPMorgan Chase, Wells Fargo and Citigroup – is recommending, among other things, that the Federal Reserve lower capital requirements and ease the periodic “stress tests” banks take to prove they can survive another economic crisis. The Federal Reserve could “make changes to its bank regulations or enact promptly already planned regulatory changes that would not reduce safety, soundness or financial stability,” the group said in a note titled “Actions the Fed Could Take in Response to COVID-19” and signed by Greg Baer, its chief executive; Francisco Covas, its head of research; and Bill Nelson, the chief economist. The recommendations are “transparently opportunistic,” said Jeremy Kress, an assistant law professor at the University of Michigan School of Business. For years, the banking industry resisted calls for higher capital requirements that could have been used as a buffer, or a rainy-day fund, during economic turmoil, he said. Those buffers could have been turned off now to give the industry more flexibility to make loans during the current economic uncertainty, Kress said. But without those buffers reducing existing capital requirements, which are currently set at minimum levels, the timing could be risky, he said.”The whole idea of capital requirements and stress-testing banks is to make sure they have enough cushion to absorb losses” during an economic crisis, Kress said.Sen. Sherrod Brown (D-Ohio), ranking member of the Banking Committee, said in a statement that: “My priority right now is ensuring that our federal, state and local health agencies have the resources they need to keep Americans safe. It’s not the time to reduce financial system protections to bolster the bottom lines for Wall Street.” Treasury Secretary Steven Mnuchin told reporters after a hearing on Capitol Hill Tuesday that he is talking to bank regulators about potential regulatory relief measures. The staff of the Financial Stability Oversight Council, a group of high-level regulators, is also scheduled to discuss the coronavirus during a meeting this week, according to a person familiar with the planning but not authorized to speak publicly.

Warren queries large banks on their coronavirus planning – Sen. Elizabeth Warren is asking the chief executives of five of the largest U.S. banks for details on how they are managing risks associated with the coronavirus.In a letter Friday, the Massachusetts Democrat and candidate in the Democratic presidential primary asked the CEOs of Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley a series of questions about their response to the outbreak, warning that it could have an impact on their operations, customers and growth.”As a globally systemic important bank, your institution and the customers it serves could be impacted either directly through exposures to areas where the virus has spread or indirectly through a change in market conditions caused by disruptions in supply chains, a drop in tourism or travel, or numerous other factors that could cause a slowdown in economic growth,” Warren said in the letter. She is asking the CEOs to respond by March 13. Warren says in the letter that the banks’ customers could be among businesses that have curbed or shut down their operations because of the virus, making it harder for them to repay their loans. She said those effects may be more pronounced in banks with direct exposure to regions where the coronavirus is most prevalent.She added that threats from the virus are “particularly disturbing because they come after regulators either have weakened or are attempting to weaken critical safeguards put in place after the 2008 financial crisis.” Warren is asking the CEOs to explain which economic sectors they are monitoring most closely in the midst of the coronavirus outbreak and what level of exposure the banks have to China, South Korea, Japan, Singapore, Thailand, Italy and Iran.She is also asking the CEOs if they believe the virus will have an impact on revenue and profits or on demand for commercial and industrial loans; if their banks are sufficiently capitalized to cover any potential losses from nonperforming loans; and if the banks’ internal risk models include scenarios involving a global pandemic.

Banks deal with coronavirus; Fed finalizes bank capital rules – “HSBC has evacuated dozens of staff from its office in London’s Canary Wharf after a staff member reported a confirmed case of coronavirus, ” the Financial Times reports. “The employee, who works in the investment bank’s research department, has self-isolated and the rest of the team are now working from home, according to a person familiar with the events.” “If confirmed, it would be the first case of COVID-19 in one of London’s major financial institutions,” the Sun reports. “HSBC employs around 10,000 people at its Canary Wharf headquarters and 40,000 people across the U.K.” The Federal Reserve overhauled capital rules for the largest U.S. banks, “completing one of the biggest changes to the postcrisis rulebook for Wall Street during the Trump administration,” the Wall Street Journal reports. The Fed said “the changes would simplify rules for big banks such as JPMorgan Chase and Wells Fargo without posing risks to the stability of the financial system.” “Parts of the overhaul are likely to be welcomed by big banks, including changes that streamline aspects of stress tests, which require 34 large banks to show how they would weather simulated market and economic shocks. Wednesday’s plan reduces the total number of big-bank capital requirements to eight from 13, the Fed said. For large Wall Street firms, those changes could be offset by a new ‘stress capital buffer.'””The final rules are largely unchanged from the original proposals,” the Financial Times notes, “and do not include a countercyclical buffer, which some expected after the Fed’s supervision head Randal Quarles praised the concept in public speeches.””Today’s rule gives a green light for large banks to reduce their capital buffers materially, at a time when payouts have already exceeded earnings for several years on average,” said Lael Brainard, “the last remaining Fed governor chosen by President Barack Obama” and the lone dissenter to the Fed’s decision. “She has regularly warned against chipping away at rules meant to prevent the kind of risk-taking that exacerbated the financial crisis,” according to the New York Times.”Notably, the final rule removed a bank’s leverage ratio – a non-risk-weighted measure of capital adequacy – as a component of the stress capital buffer,” American Banker reports. “The so-called stress leverage buffer requirement in the proposal had drawn industry criticism.” Banks in the U.S. and U.K. are “sending hundreds of staff to test their disaster recovery sites, installing big screens in traders’ homes and pushing regulators for a reprieve on trading rules so they can keep their businesses running through a coronavirus outbreak,” the FT reports. “The efforts by big global banks including Goldman Sachs, JPMorgan Chase, Morgan Stanley and Barclays are an escalation of business continuity planning that has already prompted them to segregate staff in Asian cities at the epicenter of the coronavirus outbreak.” While many employees “can work from home with relative ease, regulatory and technology demands make the situation more complicated for salespeople and traders,” the paper notes. “To prevent those staff from being forced into quarantine en masse over a single coronavirus incident, banks are looking at spreading them out between head office and disaster recovery sites that have the same technical capacity as their main sites.” “For many companies it will be a first-time experiment with home working on a wide scale, but as many Asian offices begin to normalize working practices after their own attempts to stop the spread of the virus, the signs are that the European industry will adapt,” Reuters says.

Agencies cancel community reinvestment conference due to coronavirus – The Federal Reserve, Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are postponing next week’s National Interagency Community Reinvestment Conference due to growing health concerns about the coronavirus, the agencies said Thursday. The biennial conference was scheduled to take place in Denver from March 9-12. It was to be co-hosted with Fed’s regional banks in San Francisco, Kansas City and Chicago. In a news release, the three agencies said they “jointly made this decision out of an abundance of caution to help safeguard the health and well-being of the more than 1,300 registered conference participants.” The organizers of the conference are working to secure a new date for the event “as soon as possible” later this year, the regulators said.Comptroller of the Currency Joseph Otting and Esther George, the president and CEO of the Federal Reserve Bank of Kansas City, were among the conference’s scheduled speakers. The event was slated to feature updates on the Trump administration’s efforts to reform the Community Reinvestment Act, compliance training for banks and discussions on new community development trends and issues.

Coronavirus Slams U.S. Hotel Industry’s Global Operations – WSJ – The hotel industry’s decadelong run of growth and rising revenue looked vulnerable at the start of the year. Now the spread of the coronavirus threatens to make it the worst performing year since the recession. The biggest hotel brands have already warned about how tough last month was, and how challenged the first quarter is going to be. Marriott International Inc. said during an earnings call last week that revenue per available room for Greater China, which represents about 9% of the company’s total room count, plunged nearly 90% in February compared with the year earlier. Hilton had estimated that the coronavirus outbreak will hurt its full-year adjusted earnings by $25 million to $50 million, assuming that the outbreak lasts around three to six months. Hyatt Hotels Corp. President Mark Hoplamazian said hotels in Singapore, Japan, and the Indonesian island of Bali also reported declines in recent bookings, driven by a sharp pullback in Chinese travel. “So I would say we’ve seen it radiate across the globe,” Mr. Hoplamazian said on an earnings call on Feb. 20. On Monday, Hyatt said in a release that it was withdrawing its previously announced 2020 outlook following corporate travel restrictions in North America and Europe and cancellations outside of Greater China. . Hotel share prices reflected that gloomy outlook, trading off in recent days and failing to get much traction during Monday’s broader stock market rebound. The Dow Jones US Hotel & Lodging REIT Index fell 14.71% “Over the past 72 hours we have been hearing rapidly increasing chatter from our private hotel owner, property manager, and corporate travel contacts of travel restrictions, meeting cancellations and/or poor meeting attendance,” C. Patrick Scholes, a senior lodging analyst at the bank SunTrust Robinson Humphrey Inc., wrote in a Sunday client note. While most of the events that have been canceled or postponed were scheduled abroad, some U.S. groups recently have called off events, too. Organizers of a cargo shipping trade conference – expected to attract more than 2,000 participants to Long Beach, Ca., during the first week of March – canceled and cited the virus, according to a Saturday notice on the organizer’s website.

Hotels: Occupancy Rate Decreased Year-over-year -From HotelNewsNow.com: STR: US hotel results for week ending 29 FebruaryThe U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 23-29 February 2020, according to data from STR. In comparison with the week of 24 February through 2 March 2019, the industry recorded the following:

Occupancy: -1.7% to 64.1%

Average daily rate (ADR): +1.6% to US$129.67

Revenue per available room (RevPAR): -0.2% to US$83.16

Occupancy and ADR declines for the week were most pronounced on the weekend (28-29 February). Also of note, U.S. airport hotels reported a 3.8% decrease in occupancy for the week.”We continue to monitor performance in proximity to U.S. airports for early indicators of a coronavirus impact,” said Jan Freitag, STR’s senior VP of lodging insights. “What stands out are the demand patterns in airport markets that see a greater volume of international traffic. We saw declines in airport markets like Newark, Chicago, Denver, San Francisco and New York, while markets with a lot of domestic traffic like Orlando, Dallas and Atlanta were actually up for the week. The coming weeks will be important to monitor for more defined trends, especially with increased coverage around the outbreak and potential event schedule adjustments.” The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

United Airlines Cuts U.S., International Flights in Response to Coronavirus – WSJ – United Airlines Holdings Inc said it would cut domestic flights as the spreading coronavirus depresses bookings. Airlines world-wide have parked more than 1,000 planes as bookings have fizzled and concerns have risen that depressed demand could extend into the busy peak summer season. The carrier said Wednesday it plans to store some wide-body jets and is offering staff unpaid leaves of absence in April, the latest effort by airlines to mitigate the shock to the industry caused by cascading travel restrictions and passenger concerns over flying. Other U.S. carriers have sought to stimulate demand by offering passengers the option to change flights without penalties. United will cut domestic capacity by 10% in April from its previous plan and international flying by 20%, Chief Executive Oscar Munoz and President Scott Kirby said in a message to staff. These cuts could extend into May. The Chicago-based carrier has the biggest exposure to international markets among U.S. carriers. Half the cuts will be on trans-Pacific services and 10% on trans-Atlantic flights. The airline has already suspended most of its flights to China, South Korea and Italy, as have most of its U.S. peers.

Airlines: Bleeding from Coronavirus, and Worse to Come — Yves here. It’s not looking pretty in the travel industry, particularly for players like airlines that have international business as important. Even casual readers of the press have heard about widespread coronavirus-induced cancellations of conferences, restrictions in some countries and regions of large gatherings, corporate travel bans, and scuppered sports matches, including possibly the Tokyo Olympics.The Financial Times ran a sober “is there life after coronavirus?” piece that centered on the collapse of air travel. Some vignettes: I went to Heathrow to see it first-hand. I found the airport eerily empty. “It’s been quiet all month,” said a British Airways attendant, surveying the vast hall of Terminal 5 – a monument to globalisation. BA had cancelled flights to China, Italy and beyond. Other airlines too were reporting a sharp drop in bookings, and a rise in passengers simply not turning up … There are two ways that disease outbreaks can change us.The first is through reflection … . The second is structural. The Black Death accelerated the disintegration of English feudalism: so many peasants died that the landlords lost their grip. The first world war accelerated the rise of working women: once they had replaced men in factories, a Rubicon had been crossed. If the 1918 epidemic left an imprint, it was perhaps accelerating the arrival of public healthcare.Coronavirus has already been claimed by ideologues. Donald Trump said that it justified tighter border controls; Bernie Sanders linked it to free public healthcare. Matt Stoller, a campaigner for corporate regulation, argued that coronavirus marked the end of “affluence politics” – that is, “the politics of not paying attention to what creates wealth in the first place”.Coronavirus may make us reconsider how many journeys – holidays, work trips, conferences – are actually essential. The threat of terrorism didn’t stop us flying. Since September 11, the number of US air passengers has risen by one-third; global numbers have more than doubled. The Fed is engaged in the futile exercise of trying to pull monetary levers to reverse real world breakdowns. Ambrose Evans-Pritchard pointed out the emergency 50 basis point cut, which looks to have juiced the market for all of one day, may even be counterproductive: Justified or not, there is suspicion over why the Fed has suddenly acted in this fashion. A week ago it was imperiously dismissive of rate cuts. Yet little has changed that was not already obvious to anybody listening to the world’s infectious disease experts – at least those not being muzzled by one regime or another. What did change was the overnight switch by Donald Trump’s inner circle from attempts to spin Covid-19 as a ‘hoax’ to fear that it could blow up in his face. Nor is there any consensus that a rate cut is the proper prescription. Monetary stimulus has little traction against ruptured supply chains, factory closures, and a partial shutdown of the tourist industry. Most of it is wasted, and central banks do not have much to spare. Europe and Japan have none. Wolf Richter recapped the bloodbath in the airlines. Even the purely domestic Southwest is taking a hit. Needless to say, this isn’t good news for Boeing.

Could Coronavirus Cancel March Madness 2020? NCAA Confident March Madness Will Go Ahead Despite Rise in US Cases – The NCAA remains confident March Madness will go ahead as planned, despite the outbreak of coronavirus.The men’s tournament is set to get underway on March 17, with the women’s tournament to follow three days later and the governing body of collegiate sports insisted no changes were planned as yet. “The NCAA is committed to conducting its championships and events in a safe and responsible manner,” Donald Remy, the NCAA chief operating officer, said in a statement on Tuesday night.”Today we are planning to conduct our championships as planned, however, we are evaluating the COVID-19 situation daily and will make decisions accordingly.” Also known as COVID-19, coronavirus has killed more than 3,000 people since the outbreak began in Wuhan, a city located in China’s central Hubei province, late last year. As this graphic provided by Statista shows, the virus has spread to over 70 countries, including the U.S., where 108 cases have been confirmed by the Centers for Disease Control and Prevention (CDC) – 48 of which involving people who were repatriated to America from the Diamond Princess cruise ship or on government-chartered flights from Wuhan.

38% Of People In Survey Are Avoiding Corona Beer Due To Coronavirus – A survey of more than 700 beer drinkers has revealed some stunning results. First, there are apparently no signs of intelligent life for the human race left on Earth. And second, people are completely ignorant as to what the coronavirus is, how it is transmitted and what can be done to prevent it.We say that because 38% of those people surveyed have said they “would not, under any circumstances,” buy Corona beer as a result of the deadly coronavirus spreading, according to KRON/CNN. There’s obviously zero link between the two, aside from them both having similar names. 16% of the people surveyed said they “were not sure” whether the virus is related to Corona beer and 14% of respondents who regularly drink Corona beer said they would no longer order it in public. Sometimes your brand just gets unlucky. Ronn Torossian, Founder and CEO of 5WPR, the public relations firm that conducted the survey said: “There is no question that Corona beer is suffering because of the coronavirus. Could one imagine walking into a bar and saying ‘Hey, can I have a Corona?’ or ‘Pass me A Corona’?” He continued: “While the brand has claimed that consumers understand there’s no linkage between the virus and the beer company, this is a disaster for the Corona brand. After all, what brand wants to be linked to a virus which is killing people worldwide?” Constellation brands, brewer of the beer, says the timing couldn’t be worse. They were on the precipice of introducing a new Corona branded hard-seltzer product for the summertime. Promotion for the drink, which uses the phrase “coming ashore soon”, has already been criticized.

What to watch on jobs day: Expected future impact of COVID-19 -As COVID-19 – commonly known as the coronavirus – continues to spread throughout the world, it is likely to have a direct impact on the United States through the health and well-being of our population. It is also likely to have an impact on economic activity, as workers stop working to care for themselves or their families, and people generally reduce social spending. I’ll be watching this in tomorrow’s job report from the Bureau of Labor Statistics, and keeping an eye on it in the coming months. The first order of business, however, is to make sure that workers can follow the Centers for Disease Control and Prevention (CDC)’s recommendationsto stay home and seek medical care – if they are lucky enough to have paid sick days and health insurance. While there are still very few reported cases in the United States, it is expected to spread and the effects may be far-reaching.In terms of the economy, there has already been an impact on the manufacturing sector as inputs from China are delayed because of temporary factory closures. The Federal Reserve has cut interest rates in expectation of further economic disruptions. Many employers are making contingencies for workers to telecommute rather than risk illness. Unfortunately, this isn’t an option for millions of workers in direct service professions across the economy. Another likely side-effect of the pandemic is a pull-back on social consumption. Either because people become sick themselves or are avoiding public spaces, there will likely be a drop in certain types of spending across the economy. The figure below takes a top-down look at the economy and shares of private-sector employment for various sectors. Manufacturing makes up 10% of private-sector employment and may report some losses in Friday’s jobs report as inputs to production are delayed. The delay in inputs will likely impact construction as well. But, what about the reduction in social spending? Retail trade – minus nonstore retailers – represents 11.7% of private-sector employment. Leisure and hospitality – of which food services and drinking places are a major part – will likely experience a downturn. This sector represents 12.9% of overall employment. Other services – such as personal care services – represent 4.6% of the private-sector labor force. All three sectors combined represent over one-fourth (29.2%) of private-sector employment. If consumption drops as it is expected to, employment in these sectors may experience short-term, but serious losses.

Amazon tells all 798,000 employees to halt travel, in US and internationally, over coronavirus fears Amazon told all 798,000 of its employees on Friday to avoid “non-essential travel” domestically and internationally because of concerns about COVID-19, the disease caused by the coronavirus, a spokesperson for the company confirmed to Business Insider.Earlier on Friday, The New York Times reported that employees on Amazon’s worldwide operations team, which oversees much of the company’s technology and logistics globally, received a separate email from the senior vice president in charge of the team, Dave Clark, telling them not to plan any meetings requiring travel until at least April, when the company hoped to have a better sense of the outbreak’s impact.The spokesperson confirmed that the guidance on avoiding nonessential travel was sent to all employees, including those on the worldwide operations team. Amazon had already announced restrictions on travel to and from China in January, telling workers who had been to the region to work from home for two weeks upon returning and seek medical attention if they showed symptoms, in-line with guidance from companies like Apple, Google, Facebook, and Microsoft.

Coronavirus Poses Dilemma for Workers Who Risk Losing Pay – WSJ – The 33.6 million U.S. workers with no access to sick leave would face a dilemma should they get sick during the coronavirus epidemic: stay at home and see paychecks shrink, or go to work and create health risks.Unlike many industrialized countries, U.S. workers aren’t guaranteed pay when they take off from work due to an illness. Economists and labor experts say that poses challenges for workers and employers in situations where sick pay isn’t offered, or when workers are penalized for extended work absences. “For many individuals, they can’t afford not to go to work,” said Christopher Ruhm, a professor of public policy and economics at the University of Virginia. The jobs they hold – including food preparation, housekeeping, cleaning, driving and running cash registers – also have a high level of contact with the public, meaning their risk of exposure to the virus is higher. About 86% of U.S. workers were employed in service industries last year, up from about 60% in the 1950s, as jobs in health care and hospitality have surged in recent decades. Industries with workers in those categories said they are working to ensure sick workers feel comfortable staying at home. Treasury Secretary Steven Mnuchin told Congress on Tuesday that the administration is considering measures to support businesses facing disruptions related to the virus, as well as workers who may not have paid sick leave. The National Retail Federation, an industry trade group, is communicating with the Centers for Disease Control and passing along updates to members. Last week the federation told members that “sick leave policies need to be flexible….It may be necessary to develop an emergency sick leave policy.” Access to paid sick leave is strongly correlated to income. While 73% of workers in the private sector in 2019 had paid sick leave, according to the Labor Department, fewer than half in the bottom 25% of wages had access to it. That compares with 90% who have paid sick leave among the highest quarter of earners. Moreover, working from home might be feasible for many white-collar workers but isn’t possible for many blue-collar, service-industry jobs. Missing a paycheck due to illness could drive many households deep into the red. The Federal Reserve estimates that roughly a quarter of adults skipped medical care in 2018 because they were unable to pay, and almost 40% of Americans said they didn’t have enough cash on handto cover an unexpected $400 expense.

The Coronavirus Is Hammering China’s Economic Outlook – WSJ – China’s coronavirus epidemic is depressing its economic outlook, with new government readings on the manufacturing and service sectors validating informal indications that the country is struggling to get back to work. A Chinese government index that tracks sentiment among purchasing managers at manufacturers fell to its lowest level on record in February, dropping deep into territory that indicates a contraction. China’s National Bureau of Statistics said Saturday that its 15-year-old index tumbled to 35.7 from 50.0 in January – below even the lowest level recorded during the global financial crisis.A related index that tracks purchasing plans in services industries plunged to a record low of 29.6 – deep below the 50 mark that separates expansion from contraction – suggesting weakness in construction, transportation, restaurants and tourism. The reports are the first official economic checkpoints to be released during the crisis. They confirm a freeze that dates to late January, when authorities signaled the disease, now called Covid-19, was spreading faster than they thought. They then clamped down on countrywide transportation and business activity. “Today’s PMI data suggest that things are really bad,” said Larry Hu of Macquarie Group in a note. It is even possible the government will report a first-quarter contraction for the first time since the end of the Cultural Revolution, he said.The disease and China’s response hammered both production and demand, said Zhang Liqun, an analyst with a government-linked business organization, the China Federation of Logistics & Purchasing. The statistics bureau, which releases the index together with the federation, predicted there would be some rebound next month as more manufacturers resume activity; authorities say the worst of the health crisis may have passed. China accounts for a little more than 16% of global economic output, so disruption in the world’s second-largest economy is expected to have an impact on a number of other economies.

China Composite PMI Crashes To Record Lows As Services Economy Implodes – Stagnating consumption amid the coronavirus epidemic has had a great impact on China’s service sector in February, as one would expect. February PMI data signalled the first reduction in business activity across China’s service sector on record due to restrictions implemented to contain the recent coronavirus outbreak. Firms across all sectors reported on the damaging effect that the virus was having on the economy via company closures and travel restrictions, with total new orders also falling at a record pace. Restrictions around travel also impacted firms’ ability to source workers, leading a renewed fall in staff numbers. Consequently, backlogs of work rose at a substantial pace. Commenting on the China General Services and Composite PMI data, Dr. Zhengsheng Zhong, Chairman and Chief Economist at CEBM Group said: “The Caixin China General Services Business Activity Index fell to 26.5 in February, about half the reading of the previous month, marking its first drop into contractionary territory since the survey launched in November 2005. Stagnating consumption amid the coronavirus epidemic has had a great impact on the service sector.

• 1) Demand for services shrank sharply. Both the gauges for total new business and new export business dropped to their lowest levels on record.
• 2) It was difficult for service providers to recruit workers, and backlogs of work climbed. The drop in the employment gauge was relatively small, but its February reading marked the lowest point on record. The measure for outstanding orders surged to a record high. Supply capacity across the service sector was insufficient amid restrictions on the movement of people.
• 3) The measure for input costs dropped at a steeper rate than that for prices companies charged customers, because of a sharp decline in supply capacity.
• 4) Business confidence also fell to a record low. Although policies have been introduced to provide tax and financing support for industries and small businesses heavily impacted by the epidemic, service companies were still concerned about uncertainties resulting from the epidemic.

China Car Sales Crash 80% As Virus Paralyzes Auto Industry – Car sales in China fell 80% YoY in February, the sharpest monthly decline in nearly two decades amid the Covid-19 epidemic kept consumers away from dealerships, according to the China Passenger Car Association (CPCA). The outbreak of the virus has had a significant impact on China’s automobile industry as it has been cycling down for the last two years. Global automakers have been pouring money into China, such as Tesla, to capture a robust consumer. Still, it could be seen as the wrong move at the moment, due in part to a collapse in consumption starting in mid-January. A twin shock has plagued the automobile industry in China, one where a supply shock has hit manufacturers, who can’t produce automobiles at full capacity because of labor shortages and lockdowns, along with a demand shock that has kept people away from dealerships. While supply woes could be resolved with near term factory restarts, demand woes are expected to linger through the first half of the year. To illustrate the plunge in business activity, Caixin China Composite Output Index plunged to 27.5 in February from 51.9 in the previous month, one of the quickest drops on record. The virus outbreak has led to company closures and travel restrictions that have ground China’s economy to a halt.

Seventy trapped after Chinese coronavirus quarantine hotel collapses – (Reuters) – About 70 people were trapped on Saturday after a five-storey hotel being used for coronavirus quarantine collapsed in the port city of Quanzhou in southeast China, state media said. A live video stream posted by the government-backed Beijing News site showed rescue workers in orange overalls clambering over mounds of rubble and carrying people toward ambulances gathered around the site. Beijing News said the Quanzhou Xinjia Hotel had been five storeys high. It collapsed at about 7:30 p.m. (1130 GMT) and 34 people were rescued in the following two hours, the Quanzhou municipality said on its website. No reason was given for the collapse. The official People’s Daily said the hotel had opened in June 2018 with 80 rooms.

China January-February exports tumble, imports slow as coronavirus batters trade and business – (Reuters) – China’s exports contracted sharply in the first two months of the year, and imports slowed, as the health crisis triggered by the coronavirus outbreak caused massive disruptions to business operations, global supply chains and economic activity. The gloomy trade report is likely to reinforce fears that China’s economic growth halved in the first quarter to the weakest since 1990 as the epidemic and strict government containment measures crippled factory production and led to a sharp slump in demand. Overseas shipments fell 17.2% in January-February from the same period a year earlier, customs data showed on Saturday, marking the steepest fall since February 2019. That compared with a 14% drop tipped by a Reuters poll of analysts and a 7.9% gain in December. Imports sank 4% from a year earlier, but were better than market expectations of a 15% drop. They had jumped 16.5% in December, buoyed in part by a preliminary Sino-U.S. trade deal. China ran a trade deficit of $7.09 billion for the period, reversing an expected $24.6 billion surplus in the poll. Factory activity contracted at the fastest pace ever in February, even worse than during the global financial crisis, an official manufacturing gauge showed last weekend, with a sharp slump in new orders. A private survey highlighted similarly dire conditions. The epidemic has killed over 3,000 and infected more than 80,000 in China. Though the number of new infections in China is falling, and local governments are slowly relaxing emergency measures, analysts say many businesses are taking longer to reopen than expected, and may not return to normal production till April. Those delays threaten an even longer and costlier spillover into the economies of China’s major trading partners, many of which rely heavily on Chinese-made parts and components. China’s trade surplus with the United States for the first two months of the year stood at $25.37 billion, Reuters calculation based on Chinese customs data showed, much narrower than a surplus of $42.16 billion in the same period last year.

Coronavirus Shutdown Leads to ‘Dramatic’ Decline in Chinese Pollution Levels — Toxic pollution levels fell significantly in China between January and February, and scientists think the newcoronavirus is a large part of the reason why. Satellite data collected by the National Aeronautics and Space Administration (NASA) and the European Space Agency (ESA) and shared by NASA’s Earth Observatory Monday show a steep decline in nitrogen dioxide levels over China between Jan. 1 to 20 and Feb. 10 to 25. The two periods coincide with the time before and after Chinese officials implemented a quarantine in Wuhan, the epicenter of the COVID-19 outbreak. “This is the first time I have seen such a dramatic drop-off over such a wide area for a specific event,” air quality researcher at NASA’s Goddard Space Flight Center Fei Liu said in the NASA post. Nitrogen dioxide is a noxious gas emitted by cars, power plants and factories. Short term exposure can aggravate the symptoms of asthma, and longer term exposure can cause people to develop asthma and be more vulnerable to respiratory infections, according to the U.S. Environmental Protection Agency. The decline in emissions over China came after Jan. 23, by which point transit in and out of Wuhan had been halted and local businesses had been shuttered, NASA said. The decline in pollution levels began over Wuhan and then spread across the country. Further images shared by NASA show how 2020’s pollution levels did not rise after the holiday the way they did during the same time last year. For an even broader view, the Ozone Monitoring Instrument (OMI) on NASA’s Aura satellite has been collecting nitrogen dioxide levels for 15 years. This year’s nitrogen dioxide levels in eastern and central China were 10 to 30 percent lower than the average levels for this time of year between 2005 and 2019. Emissions have fallen in the past because of economic upheavals. COVID-19, which has so far sickened almost 89,000 people in 65 countries and killed more than 3,000, has already spooked the global economy. Stock markets fell last week by more than 10 percent, and the Organisation for Economic Cooperation and Development warned Monday that the continued spread of the new disease could cut economic growth in half and drive several countries into a recession, The Guardian reported.

OECD Releases Dire Outlook for Global Growth as a Result of Coronavirus –The Organization for Economic Co-operation and Development (OECD) has released a dire outlook for global economic growth this year as a result of the spread of the coronavirus Covid-19. Its latest Interim Economic Outlook provides both a best-case scenario, where the virus is broadly contained, as well as a scenario in which contagion spreads.The best-case scenario, which factors in limited spread outside China, will bring little cheer to world leaders. It projects global economic growth falling to 2.4 percent this year compared to an anemic global growth of just 2.9 percent last year.If there is wider spread of the virus around the globe, the OECD says global growth could be cut to as low as 1.5 percent – which would be just half of what the OECD was forecasting last November. The OECD also projected that some countries, such as Japan and the Euro area, could enter recession as a result of stringent containment measures and loss of confidence.As the dire “Interim Outlook” was released in Paris, the OECD’s Chief Economist, Laurence Boone, said this: “The virus risks giving a further blow to a global economy that was already weakened by trade and political tensions. Governments need to act immediately to contain the epidemic, support the health care system, protect people, shore up demand and provide a financial lifeline to households and businesses that are most affected.”

Global Growth to Slow Sharply as Virus Takes Heavy Toll, OECD Says – WSJ -Global economic growth will slow sharply this year as governments attempt to contain the coronavirus epidemic, although the scale of the setback is highly uncertain, the Organization for Economic Cooperation and Development said Monday. In its “best case” scenario, the Paris-based research body said the global economy would grow by 2.4%, weaker than the 2.9% expansion projected before the viral outbreak. That lost growth is roughly equivalent to $400 billion. But it said much more severe slowdowns are possible. The global economy slowed in 2019, and was particularly weak in the final three months of the year. Given that starting point, the OECD said it is possible that the global output will fall during the first three months of this year, putting the economy at risk of recession. However, the research body is forecasting a rebound in growth during 2021, assuming the outbreak is contained over the coming months. But that recovery wouldn’t be immediate, and some lost output would never be recovered. “It’s not like it plunges and then it recovers quickly,” said Laurence Boone, the OECD’s chief economist. To date, the outbreak has been most severe in China, and the government has responded with travel bans and quarantine requirements that have closed factories and left service providers without customers. In its best-case scenario, the OECD forecasts that China’s economy will grow 4.9% this year, down from its previous projection of 5.7%. However, it expects growth to rebound to 6.4% in 2021, having previously forecast an expansion of 5.5%.

Global Manufacturing PMI Crashes To Weakest Since 2009 – Although not entirely surprising, the scale of the collapse in JPMorgan and IHS Markit Economics purchasing managers’ index for Global manufacturing in February is stunning. The global manufacturing sector suffered its steepest contraction since 2009 as demand, international trade and supply chains were severely disrupted by the COVID-19 outbreak. Output fell across the consumer, intermediate and investment goods industries, with the steepest drop at investment goods producers. Manufacturing production and new orders registered their sharpest declines since April 2009. The downturns in both were quickest in China, where output and new business fell at survey-record rates. Of the 31 nations for which February data were available, 15 registered a contraction of output, including China, Japan, Germany, France, Italy, Taiwan, South Korea and Australia. Clearly, the outbreak of COVID-19 had a marked impact on supply-chains during February… Just wait for the v-shaped recovery… any minute now!

COVID-19: Coronavirus outbreak – How will it affect the commodities markets – Platts podcast – S&P Global Platts editor Eric Yep and pricing specialists Fred Wang and Srijan Kanoi examine the impact of the novel coronavirus, COVID-19, on China’s coal and LNG markets, and take a look at potential demand centers that could absorb existing supplies in the market.

G7 Disappoints: Futures Slide After Group Of Seven Fails To Announce New Action, Vows To Use “All Appropriate Policy Tools” Less than 40 minutes after the G7 call of finance ministers and central bankers stated, the G7 issued a statement, which as Reuters warned, was a disappointment because while it vowed to use “all appropriate policy tools including fiscal measures where appropriate”, but stopped short of promising interest rate cuts or other immediate rescue measures. The joint statement of solidarity showed that the leaders of the so-called G7 nations, which also includes Britain, Canada, France, Germany, Italy and Japan, are capable of cooperation. But the statement did not announce any of the more aggressive action that investors have been hoping for and that many economists say is needed to prevent the virus outbreak from undermining global growth. In a statement, the group said that the G7 finance ministers and central bankers “are closely monitoring the spread of the coronavirus disease” and added, “given the potential impacts of Covid-19 on global growth, we reaffirm our commitment to use all appropriate policy tools to achieve strong, sustainable growth and safeguard against downside risks.” The call participants added that “central banks will continue to fulfill their mandates, thus supporting price stability and economic growth while maintaining the resilience of the financial system.” In other words, they will do nothing at this moment, and if the RBA’s disappointing 25bps rate cut (on expectations of at least 50bps) is any indication, central banks are desperate to preserve what little dry ammo they have for as long as possible. The full statement is below (link), with the following preamble: “U.S. Treasury Secretary Steven T. Mnuchin and Federal Reserve Chair Jerome H. Powell led a call with the G7 Finance Ministers and Central Bank Governors to discuss the coronavirus disease 2019. At the conclusion of their meeting, they issued the following joint statement:”

World pharma supplier India restricts export of some ingredients, drugs (Reuters) – India, the world’s main supplier of generic drugs, has restricted the export of 26 pharmaceutical ingredients and the medicines made from them, including Paracetamol, a common pain reliever also sold as acetaminophen, as the coronavirus outbreak plays havoc with supply chains. The Indian government urged calm and said there were enough stocks to manufacture formulations for two-to-three months. The government’s list of 26 active pharmaceutical ingredients (APIs) and medicines accounts for 10% of all Indian pharmaceutical exports and includes several antibiotics, such as tinidazole and erythromycin, the hormone progesterone and Vitamin B12. It was unclear how the restriction would impact the availability of these medicines in the countries that import from India and also depend on China. In the United States, for instance, Indian imports accounted for 24 percent of medicines and 31 percent of medicine ingredients in 2018, according to the U.S. Food and Drug Administration. FDA Commissioner Stephen Hahn told U.S. senators on Tuesday that the agency is working to determine how the restrictions will affect the U.S. medical supply and the effect on essential medicines. The FDA last week announced the first coronavirus-related drug shortage in the United States but declined to name the drug in question. Hahn said on Tuesday that drug was in shortage because of a lack of materials needed to make the API. Indian drugmakers rely on China, the source of the virus outbreak, for almost 70% of the APIs for their medicines. Industry experts say they are likely to face shortages if the epidemic drags on.

Coronavirus Snarls Trans-Pacific Shipping and Ripples Through U.S. Business – WSJ – The coronavirus epidemic is upending the carefully calibrated logistics of global shipping, asplunging exports from China disrupt the trade of American goods, especially farm products such as fruit and meat destined for Asia. Congestion at Chinese ports and interrupted sailings have squeezed space on China-bound vessels and created an imbalance of the 40-foot long refrigerated containers used to ship fruit, meats and other perishables on three-week voyages across the Pacific, with many stuck on the China side.The traffic jam is pushing up transportation prices for U.S. exporters and sowing turmoil on the heels of a painful trade war.Shipping volumes out of China plummeted in February as factory shutdowns in the wake of the epidemic crimped industrial production. Containership operators have canceled nearly 60 trans-Pacific sailings to the ports of Los Angeles and Long Beach, Calif., in the first quarter and more than 110 to all of North America. Normally there are about 200 sailings of container ships across the Pacific a month. That means fewer ships are available to make the return journey east, and the normal turnover of containers has stalled. “Right now empty [refrigerated] containers are in short supply,” “It’s harder to get on a vessel, and there’s not enough outbound capacity to handle all the cargo seeking bookings, particularly to China.” It’s the height of California’s orange-growing season, but truckers for Fast Way Xpress Inc., who haul oranges and other produce from the Central Valley to the port of Oakland, have waited in line there for empty refrigerated containers for up to four hours. By the time the drivers reach the shipping terminal, they sometimes then discover all the containers are gone. “The lines are so long it looks like the L.A. freeway,” A record two million containers of seaborne shipping capacity was idled in late February, according to Alphaliner, a Paris-based marine data provider. That is more than the 1.5 million containers of capacity idled in 2009 at the height of the financial crisis.

Jet Fuel Prices Dive Amid Stalling Aviation Industry; Global Tourism Bust Imminent – Airlines have canceled more than 200,000 flights as Covid-19 is nearing pandemic status. — More than 92,300 people have been infected by the virus, which has killed about 3,100 people. Many of the cases are in China, but recent cases ex-China have been surging, especially in South Korea, Iran, Italy, Japan, and in many other countries across Europe. Airlines have spent the last month canceling flights to China – American Airlines, United Airlines, and Delta Air Lines have suspended service to mainland China and Hong Kong. Reuters provides a full list of canceled flights across the world. Flights to and from China crashed 80% YoY in February, according to Cirium travel industry data. Global air travel has plunged for the first time since the 2008/09 financial crisis, mostly in the Asia-Pacific region, the International Air Transport Association (IATA) recently said. Plunging air traffic across the world has resulted in a steep decline in jet fuel. Singapore jet fuel prices have fallen 30% since the start of 2020 and contributed to a 50% collapse in jet fuel crack spreads, now at 2009 lows, Refinitiv data shows. “The coronavirus outbreak has hampered jet fuel demand in Asia and the impact is expected to linger for a few more months,” said Sri Paravaikkarasu, director for Asia oil at consultancy FGE.

Coronavirus live updates: Foxconn revenue tanks, Southwest Airlines slashes forecast – Apple supplier Foxconn’s February revenue fell 18.13% to NT 216 billion (approximately $7.26 billion), the largest year-over-year drop since March 2013 when it fell more than 19%, according to the company. Revenue fell 40.35% month over month. Foxconn cut production in China over fears of the fast-spreading coronavirus outbreak. The company said Tuesday that output has returned to 50% of capacity but that it expects to be back to full seasonal capacity by the end of March. Southwest Airlines warned investors that the outbreak will cost the U.S. carrier up to $300 million during the first quarter. “In recent days, the company has experienced a significant decline in customer demand, as well as an increase in trip cancellations, which is assumed to be attributable to concerns relating to reported cases of COVID-19,” the airline said. It said its revenue per available seat mile, a key measure of performance, was slashed. The company now says it will fall to somewhere between a 1% gain and a 2% decline. It previously said its year-over-year revenue per seat mile would rise 3.5% to 5.5%. Amazon is asking employees at its Seattle and Bellevue offices to work from home until the end of the month after an employee tested positive for the coronavirus. The company informed employees of the change late Wednesday, one day after Amazon confirmed that an employee who works in one of its Seattle offices tested positive for COVID-19. Amazon is headquartered in Seattle and has offices in Bellevue, where it employs more than 2,000 people. An Amazon spokesperson told CNBC in a statement: “We are recommending that employees in Seattle/Bellevue who are able to work from home do so through the end of the month.” Between Congress’s fiscal stimulus and the Federal Reserve’s easing, Wall Street sentiment is clear: Government spending is way more important in trying to combat the virus and, in turn, calm investors.The emergency 50 basis point Fed cut, while perhaps a reassuring signal the central bank is willing to act with speed to support the economy, isn’t able to correct big supply shocks caused by the virus, said Nathan Sheets, chief economist at PGIM Fixed Income.”The Fed’s stimulus doesn’t fix broken supply chains or persuade people who are worried about being exposed to the virus to leave their homes and spend,” Sheets wrote in an email to CNBC. “But it should provide a safety net of sorts by helping ensure that financial conditions remain supportive, lifting sentiment more generally, and helping to ensure that there is ample liquidity in the system.”

Coronavirus pushes aviation sector into ‘crisis zone’ – Airbus is reviewing its 2020 delivery targets, issued barely three weeks ago, as the global spread of coronavirus in recent days through Europe and into the US pushes the aviation industry into crisis mode. Passenger demand plunged sharply at the weekend, forcing carriers around the world to freeze hiring and slash the number of flights, including on lucrative transatlantic routes. Iata, the airline trade body, will on Thursday significantly increase its estimate of the hit to global sales as a result of the virus. Just 12 days ago it estimated a near-$30bn impact, based largely on the reduction in flights to and from China. Current data show a 2.8 per cent fall in global aircraft capacity this year, according to aviation data consultancy, Ascend, against Iata’s expectations late last year for growth of 4.7 per cent in 2020. In that context Airbus will not be alone in reassessing its guidance for this year. Executives from the aerospace and airline industries said they were monitoring the situation daily. Airbus has not decided to cut its delivery target but one person with knowledge of the situation said “there are several airlines trying to defer deliveries. It is probable that guidance will have to be reassessed before the end of March.” Analysts suggested that the impact of deferrals on Boeing could be mitigated by the year-long grounding of the 737 Max after two fatal crashes. Some airlines were also seeking a temporary holiday from lease payments, according to two industry insiders. The review by Airbus and moves this week by carriers from British Airways to Ryanair to sharply cut flights show how quickly the crisis is escalating for the sector. “We’re in a crisis zone for airlines. The situation has rather dramatically accelerated over this last weekend,” said Brian Pearce, chief economist at Iata. “This is far worse than the Sars episode,” he added. “It’s looking more like the global financial crisis, where airline revenues fell 16 per cent in 2009. We’re not there yet but it will depend on the success of which governments manage to contain this European outbreak.” On Monday BA slashed more than 400 flights between March 16 and March 28, to countries including Italy, Germany and, crucially, the US. Its decision to cut transatlantic routes was highly unusual and a sign of the deepening impact of the disease.

Coronavirus fears spark toilet paper panic buying around the world YouTube.

Aussie toilet paper tussle sparks call for calm – A fight over toilet paper in an Australian supermarket on Saturday prompted police to call for calm after the latest violence sparked by coronavirus-induced panic buying in the country. A video widely shared online shows three women pulling each other’s hair and screaming as they struggle over a large pack of the highly sought-after commodity in the aisle of a grocery store in Sydney. “I just want one pack!” one of the women screams as two others guard a trolley stacked high with rolls. Two staff members intervened to break up the scuffle and police were called but no one was arrested. “It’s not the Thunderdome, it’s not Mad Max. We don’t need to do that,” Acting Inspector Andrew New from New South Wales police told reporters, referring to the post-apocalyptic action films. The incident comes after police tasered a man involved in a scrap over toilet rolls in the NSW town of Tamworth. Police were also called to a shop in Sydney when a knife was drawn in a tussle over the scarce product. Supermarket chains have started rationing sales of toilet paper and assured customers there is no shortage.

German supermarkets report coronavirus panic buying – Germans are slowly coming to realize that they, just like 50 other nations in the world today, could soon be facing a coronavirus epidemic. Indeed, the pathogen has become a major topic of discussion in the country – so much so, in fact, that some residents are now stockpiling food out of fear they could be placed under quarantine. On Friday, a spokeswoman for one of the country’s largest supermarket groups, REWE, told DW that while they didn’t register any panic at the start of the week, the situation quickly changed. “We have noticed rising foodstuff and canned goods purchases across the entire country to which we are adapting accordingly,” said Kristina Schutz from REWE Group, which is headquartered in Cologne and runs the Penny, REWE and Nahkauf grocery chains. Discount chain Lidl has recorded a similar spike in purchases, with a spokesperson confirming that “we are noticing a rise in sales in certain regions and stores.” According to the chains, Germans are stockpiling long-lasting and canned food, pasta as well as toilet paper and disinfectants. Four years ago, the Bonn-based Federal Office of Civil Protection and Disaster Assistance (BBK) published a checklist of long-lasting foods it recommends stockpiling for emergencies. Specifically, the checklist states that one person needs 14 liters of liquid a week, and recommends stocking mineral water and fruit juice in particular. Even so, the BBK warns against panic buying, advising Germans to stockpile only foods and drinks “that you and your family would consume anyway.” The BKK also suggests stocking food that keeps for a long time without needing refrigeration, to pay attention to sell-by dates, and mark when items were purchased, in case they don’t have dates printed on them. This comprehensive emergency checklist hasn’t gone unnoticed abroad. Bulgarian daily 24 Tschassa, for example, praised the advice provided by German authorities, saying that in most cases “consumers just hoard all kinds of products – without a proper idea how long they will come in useful or whether they might need them at all.” The paper said sticking to the German checklist is a good idea “as it makes no sense to buy excessive amounts of supplies.”

HSBC London Employee Hit By Virus, Sparks Partial Evacuation – An employee at HSBC Holdings Plc’s research department in Canary Wharf tested positive for coronavirus, prompting a partial evacuation and marking the first reported case at a major London bank office. “The colleague is under medical supervision and has self-isolated,” HSBC said in a statement Thursday. “Based on medical and official advice, the building remains open and operates as normal.” Staff on the affected floor are being told to work from home, and the area is being deep-cleaned, the London-based bank said. The statement didn’t specify what division of the bank was affected, but a person familiar with the matter said earlier that it was the research department, and that trading floor operations are continuing as normal. Dozens of people have been evacuated, the person said, requesting anonymity. About 10,000 people work at the 8 Canada Square office. Banks in London have been testing their contingency plans in case wider evacuations are required. Goldman Sachs Group Inc. is testing backup trading operations in the south London neighborhood of Croydon, while JPMorgan Chase & Co. is preparing for potential staff moves as far away as Basingstoke, 45 miles southwest of the British capital, Bloomberg News has reported.

British airline Flybe collapses amid coronavirus, stranding passengers — British airline Flybe abruptly shut down Thursday, causing chaos for passengers who were slated to travel on the airline and leading the U.K.’s Civil Aviation Authority as well as train and bus services to step in to try to mitigate the upheaval. Flybe collapsed Thursday amid drops in demand caused by the new coronavirus.Northern Ireland resident Xenia Pestova Bennett, 40, was briefly stranded in Bournemouth, England, after a concert. Bennett was about to check out of her hotel room and head to the airport when she received a text telling her not to bother.The U.K. Civil Aviation Authority said in a statement Thursday that “All Flybe flights are cancelled. Please do not go to the airport as your Flybe flight will not be operating.” “FlyBe are not giving us money back or rebooking us, and I have about 10 flights booked with them for the rest of the spring, which will now be lost,” she told USA TODAY. “That’s thousands of pounds gone.”

Canceled Games and Empty Stadiums: Will the Coronavirus Spread to Sports? – The NCAA tournament. Major League Baseball opening day. The Masters golf tournament. The NFL draft, the NBA and NHL playoffs, the Boston Marathon and Olympic qualifiers all over the U.S.The busiest time of the American sports calendar is coming – if the coronavirus doesn’t come first.As the global economy braces for the potentially devastating effects of a novel coronavirus that is spreading around the world, few businesses are at greater risk of being impacted than sports. This is a multibillion-dollar industry built on live entertainment, easy travel and mass gatherings, and that makes it especially vulnerable if major cities begin to embrace social distancing, as they have in countries where the virus has already disrupted everyday life. The problem is that there is no work-from-home in sports. The NBA season can’t be played on Slack. Should games be canceled? Can they be delayed? Will they be played in empty arenas? These are the questions that leagues and governing bodies are scrambling to answer as they size up potentially the biggest disruption to the sports calendar since World War II, and they are constrained by uncertainty as they make contingency plans to keep up with this mysterious pathogen. Their behavior will be dictated by the virus’s. As corporations begin to prohibit nonessential travel for their employees, American sports leagues are monitoring the situation closely, but there have been no interruptions to schedules yet. In a World Health Organization briefing on coronavirus and sporting events last week, experts warned against canceling mass gatherings for now, while cautioning that risk management was a fluid process. But a lesson from Asia and Europe is that one day can be normal and the next can be turned upside down. If the U.S. follows the lead of the countries that have already seen outbreaks turn into epidemics, sports leagues could soon be canceling, postponing or playing games without fans, a measure that would’ve seemed drastic last week until it quickly became reality. In one of the most extreme approaches, Japan all but shut down its sports scene this month. Preseason baseball is being played entirely behind closed doors ahead of Opening Day on March 20. The national soccer and basketball leagues are postponed until mid-March. And the spring sumo tournament – a touchstone of the Japanese calendar – will unfold in an empty arena.

Citi Shoots Down Wall Street’s V-Shaped Recovery Theory -Expectations that the global economy will bounce back from the coronavirus are looking increasingly misplaced, according to Citigroup Global Markets.”V-shape recovery theory has been significantly challenged, as investors correctly entertain the idea of a far more protracted recovery,” strategists including Luis Costa, Dumitru Vicol and Sara Felizardo wrote in a note.The Covid-19 virus, which started in China, is now weighing on developing nations directly through supply chains and via more sluggish growth, the strategists said. While the Federal Reserve’s rate cut has helped stocks par losses, lower rates worldwide won’t “lift all boats in EM.””The feedback loop between U.S. equities, EM credit and EMFX in this environment is biased to the downside,” the strategists wrote. “It is absolutely clear to every single investor that the general end of 2019 EM/DM growth consensus is not going to materialize.” The coronavirus and measures to contain it offer a rare twin supply-demand shock to the world’s economy with Chinese factories shuttered just as consumers become more hesitant to shop, travel or eat out. Outside the most at-risk nations in Asia, Israel, Russia and Chile are among the most vulnerable markets from a global slowdown standpoint, according to Citi. Pressure on governments to pay health care expenses could also leave the Caribbean, nations that were once a part of the Commonwealth of Independent States and Africa in trouble, they wrote.

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