Coronavirus Economic News 14March 2020

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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This week my survey collection is about 3/4 U.S. related, with a handful of foreign / international impacts near the end. While the survey of what’s going on in Europe and Asia may have missed some important things, my sense is that the U.S. coverage is fairly thorough and representative.

U.S. Repo, the Fed, Coronavirus, and Global Demand/Supply Shocks – Michael Schussele – As I pointed out on March 3, the market noise of March 2nd when the Dow went down 5.09% on significantly lower volume was not the cause (the stock market is noise and not of data interest to the Fed) and I pointed to the repo spike on the morning of March 3rd of the one day U.S. Repo to $108.608 billion which was $8.608 billion more than the $100 billion Fed cap on one day repo. On 2/28 U.S. Repo was only $26.240 billion and on 3/2 it doubled to $53.140. On 3/4 the submitted amount was $111.478 leaving $11.478 billion not accepted over the $100 billion Fed cap. 3/5 went down to $87.357 billion; 3/6 was $89.607 billion; and 3/9 was $112.932 billion, all of which was accepted because the Fed raised their cap to $150 billion through 3/12. In comparison the significant 2019 repo market stress, which was very disruptive, began on September 17, 2019 at $53.150 billion and never went over $90 billion on any one day through November, 2019. The 14 day repo has been capped at $20 billion and on 3/3 $50.950 billion was not accepted and on 3/5 $52.550 billion was not accepted, but on 3/9 the Fed raised the cap to only $45 billion through 3/12. You can find recent repo operations here and you can do an historical search here. Tim Duy, who had correctly called the 50 basis points cut, correctlynotes the market will not be satisfied, but believes early action by the Fed will help short circuit recessionary dynamics and allow the Fed to squeeze through without returning to the zero bound. However, Stephen Williamson expressed concern, as I did on March 4, that the potential gains of the Fed cut were too small and the potential costs too large and the Fed should have waited for more data or cut less aggressively. Both economists indicate that fiscal stimulus from the Federal government is needed as the Fed cannot do it alone though monetary policy. Williamson is also not supportive of the Fed continuing to buy $60 billion in treasuries each month if the market is seeking safe assets and the Fed could sell treasuries exchanging treasuries for cash in its assets and reserves. However, the Federal Reserve has a model of a supply of ample reserves in the implementation of monetary policy. Keep your eye on the daily U.S. repo operations. If it keeps moving up, much less continuing at the high submissions seen this March, you will probably see another Federal Funds Rate cut at the March 17-18 meeting — maybe sooner. The Fed needs to maintain liquidity and has demonstrated with the 50 basis points cut it is ready to act strongly. The market wants a 75 basis points cut, but the market is noise (not data driven but reactive to data) and, like a two year old child, is never satisfied (want want want). Some economists want a 1% cut or cut to zero, but such a preemptive strike is, in my opinion, very risky; I want to the Fed waiting for the data and saving ammunition to deploy if a recession appears more likely as the risks evolve in the current demand and possible supply shocks.

Fed pledges more than $500 billion to keep funding markets calm – The Federal Reserve is trying to get ahead of possible funding disruptions caused by the coronavirus, ramping up cash injections in the coming weeks to as much as $505 billion in a bid to keep short-term financing markets functioning smoothly through quarter-end. The central bank’s New York branch said Wednesday that it would conduct additional repurchase-agreement operations that could take its support for this crucial corner of the financial markets beyond the total of $490 billion it offered over year-end. Policymakers are trying to avert a repeat of September, when short-term borrowing costs spiked amid imbalances in the supply and demand for cash. The Fed’s announcement covers operations starting Thursday, and comes as stocks are plummeting on concern about the damage to the economy from the viral outbreak, which the World Health Organization is now calling a pandemic. Turbulence in Treasuries, where yields sank to record lows this week, may have played into the Fed’s approach. Volatility in spreads between the cheapest-to-deliver Treasury securities and their associated futures contracts appeared to draw a response from regulators, analysts said. On Monday, the New York Fed unexpectedly increased the size of this week’s repo offerings to $150 billion for the overnight action and $45 billion for the term as financial markets convulsed, up from $100 billion and $20 billion, respectively. The Fed now plans to offer 14-day term repo operations twice a week through April 9 of at least $45 billion. It will also conduct three one-month actions of at least $50 billion beginning Thursday. The bank also boosted its overnight offering to $175 billion daily through April 13. The Fed has been conducting repo offerings and Treasury-bill purchases in a bid to keep control of short-term rates and bolster bank reserves. The efforts have calmed markets since September, when overnight repo rates soared as high as 10%, and also helped quell concern about a potential cash crunch at the end of 2019. The overnight rate was around 1.21% Wednesday afternoon, within the Fed’s target range of 1% to 1.25%.

Fed announces $1.5 trillion in capital injections to combat coronavirus fallout and ‘highly unusual disruptions’ – The Federal Reserve Bank of New York will start adding fresh capital to money markets on Thursday to pad against coronavirus risks and ease stresses on the Treasury-bill market. The extraordinary funding measure first involves a $500 billion injection at 1:30 p.m. ET on Thursday, the bank said. The cash will be added to money markets through a three-month market repurchase agreement, or repo operation. One-month and three-month repos for $500 billion each will be conducted on Friday and continue to be offered weekly through the calendar month, the bank added. The central bank said it would also expand its $60 billion reserve-management purchases to buy up “a range of maturities” roughly matching that seen in Treasury assets outstanding. Securities targeted include Treasury bills, floating-rate notes, and nominal coupons. The first such purchase will begin Friday, the bank said. The Fed’s previously scheduled daily overnight and two-week repos will still take place through the end of the week, adding as much as $220 billion to money markets. The massive stimulus measure was made in accordance with the Federal Open Market Committee and in response to unprecedented liquidity issues in the Treasury-bond market, the New York Fed said. “These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the bank said. The announcement fueled a sharp uptick in the ailing stock market on Thursday afternoon. Stocks sat more than 8% lower before the Fed’s statement pared some losses. By the end of the central bank’s Thursday operation, the Fed’s balance sheet will have reached an all-time high. The magnitude of the Fed’s new liquidity measures signals a “full-blown crisis response operation,” Ian Shepherdson, the chief economist at Pantheon Macroeconomics, said in an emailed statement. The FOMC is likely to slash its interest rate by 50 basis points at its meeting next week to further ease money-market stresses before the federal government issues its own aid, he added. “Now it’s up to Congress to fire the fiscal bazooka, the bigger and quicker the better,” Shepherdson said.

Bazooka Fired: Fed Unleashes $1.5 Trillion Repo Bailout, Expands “Not QE” To QE5 – -After increases in its repo facility twice already this week, from $100billion to $150billion to $175billion per day, and adding added a new 1-month term repo facility, the New York Fed just stunned the market and fired its biggest bazooka since Lehman (not coincidentally, just moments before today’s 30Y Treasury auction, as a failed auction would mean, well, game over), by announcing a total of $1 trillion in 3-month repos over two days ($500BN today, $500BN tomorrow), as well as an additional $500BN in one-month repos offered weekly,which means up to $3 trillion in cumulative repos (if fully allotted) may be online by the end of the month. But wait, there’s more, because the fed also finally threw in the towel on the semantics bullshit it was pulling since Sept 2019 by pretending that “QE” is “NOT QE”, when it officially expanded not-QE/QE4 to Q5, when it announced it would start purchasing coupon Treasuries as part of its POMO operations, which as a reminder, was the official trigger transforming Not QE into QE . For some context of how that compares to what they have been doing, assuming full allotment on the 2 $500BN repos… from the NYFed:

• As a part of its $60 billion reserve management purchases for the monthly period beginning March 13, 2020 and continuing through April 13, 2020, the Desk will conduct purchases across a range of maturities to roughly match the maturity composition of Treasury securities outstanding. Specifically, the Desk plans to distribute reserve management purchases across eleven sectors, including nominal coupons, bills, Treasury Inflation-Protected Securities, and Floating Rate Notes. The distribution of purchases across sectors will be the same distribution as the Desk uses to reinvest principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in Treasury securities. The first such purchases will begin tomorrow, March 13, 2020.
• Today, March 12, 2020, the Desk will offer $500 billion in a three-month repo operation at 1:30 pm ET that will settle on March 13, 2020.
• Tomorrow, the Desk will further offer $500 billion in a three-month repo operation and $500 billion in a one-month repo operation for same day settlement.
• Three-month and one-month repo operations for $500 billion will be offered on a weekly basis for the remainder of the monthly schedule.
• The Desk will continue to offer at least $175 billion in daily overnight repo operations and at least $45 billion in two-week term repo operations twice per week over this period.

These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak. Reserve management purchases into the second quarter will continue to be conducted with this maturity allocation. The terms of operations will be adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation. Finally, for those looking forward to the official return of QE, i.e., the monetization of coupons in addition to Bills, here is the Fed’s full monetization schedule.

NY Fed boosts purchases of Treasurys to try to calm markets (AP) – The Federal Reserve moved Thursday to try to ease disruptions in the financial markets stemming from the coronavirus by announcing that it will sharply increase its purchases of short-term Treasury bonds. The Fed said it’s making available at least $2 trillion in short-term lending as a way to ensure that the Treasury market can function smoothly. It’s also broadening its ongoing $60 billion-a-month purchases of Treasurys to include longer-term bonds. Initially, the Fed’s actions led the stock market to sharply pare its deep losses, before share prices fell back down. By mid-afternoon, the Dow Jones Industrial Average was still off more than 8%. Likewise, the announcement caused Treasury yields to fall before they rose back up again. The reaction in the markets suggested little faith that the Fed’s moves would do much to restore the confidence of investors and consumers in the face of travel disruptions, event cancellations and business closures. Thursday’s central bank action, being led by the New York Fed, is intended to keep credit markets functioning and ensure that banks can continue to provide loans to businesses and other borrowers across the economy. “The New York Fed fired its bazooka,” said Paul Ashworth, an economist at Capital Economics. The action follows signs of stress in the bond market. On Wednesday when the stock market plunged, bond yields actually rose. Typically, in circumstances like this, the two would move together: Investors would move en masse into the bond market, driving down bond yields as bond prices rose. The disjointed move in prices likely signals a lack of liquidity in the bond market. That means there are too few buyers or sellers, causing prices to move violently and make prices less easy to pinpoint. “There are massive concerns out there,” said Tom di Galoma with Seaport Global Holdings. “Market-making is under severe pressure. This is beyond the market’s current capabilities.” In a note to investors, analysts at Bank of America said that the U.S. bond market has “materially deteriorated over recent days” and now “requires a rapid and large near-term policy response from the U.S. treasury or Federal Reserve.” Earlier in the day, the European Central Bank deployed targeted new stimulus measures to cushion the shock to the economy from the virus outbreak. The ECB’s president said, though, that monetary policy couldn’t do it alone and called for a “decisive and determined” response from governments.

Fed unveils dramatic measures to ease market strain from virus –The Federal Reserve took aggressive steps Thursday to ease what it called “temporary disruptions” in Treasuries, flooding the market with liquidity and widening its purchases of U.S. government securities in a measure that recalls the quantitative easing it used during the financial crisis.The Federal Reserve Bank of New York said in a statement that the “changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak” and had been done at the direction of Fed Chairman Jerome Powell in consultation with the Federal Open Market Committee. Under the Fed’s existing program to buy $60 billion a month in securities, the purchases will be widened to include coupon-bearing notes across a range of maturities to match the maturity composition of the Treasury market, it said.Treasuries resumed rising and stocks pared losses after the surprise announcement, made about 10 minutes before the bidding deadline for $16 billion auction of new 30-year bonds. The current 30-year yield quickly shed about 10 basis points to 1.25% ahead of the auction as investors absorbed the Fed’s muscular move.“This is a full-blown crisis response operation, intended to make it abundantly clear that the Fed will not allow liquidity to dry up,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics. “We expect the Fed to purchase $60 billion of securities across the spectrum for the foreseeable future: QE4 is here.” In addition, the New York Fed offered $500 billion in a three-month repo operation and said it would repeat the exercise tomorrow, along with another $500 billion in a one-month operation, and continue on a weekly basis for the rest of the monthly calendar. This adds a massive jolt of liquidity to financial markets that will also expand the Fed’s balance sheet for the duration of the operations. The Fed has been under increasing pressure to act as investors lost faith the U.S. government’s ability to quickly produce a coherent policy response after President Donald Trump addressed the nation Wednesday with few details on fiscal stimulus plans but restrictions on travel from Europe to the U.S. that deepened the sense of alarm.

Democrats introduce bill to guarantee paid sick leave in response to coronavirus -Democrats in the House and Senate introduced legislation Friday that would require all employers to grant workers paid sick days in light of the global coronavirus spread. The bill unveiled by Rep. Rosa DeLauro (D-Conn.) and Sen. Patty Murray (D-Wash.) would mandate all employers to let workers accrue seven days of paid sick leave and immediately provide 14 additional days when there is a public health emergency. Health authorities have been encouraging Americans to stay home if they feel sick to help prevent potential spread of the coronavirus, but the lack of a federal guarantee for paid leave has raised concerns that some workers – especially in the service and restaurant industries – might not be able to follow those guidelines. “The lack of paid sick days could make coronavirus harder to contain in the United States compared with other countries that have universal sick leave policies in place,” DeLauro, who chairs the House Appropriations subcommittee overseeing federal health agencies, said in a statement. “Low-income workers and their families could be hit even harder by the virus, as low wage jobs are at the forefront of not providing sick leave benefits.” The two Democrats expressed concern that given the choice between staying home sick and going unpaid, low-wage workers would still show up to work, potentially spreading the virus in their communities. “Workers want to do the right thing for themselves, their families, and their communities – so especially in the middle of public health crises like this, staying home sick shouldn’t have to mean losing a paycheck or a job,” Murray said. DeLauro’s and Murray’s bills would also ensure that paid sick leave can be used in a public health emergency for taking care of children if schools are closed or if a worker or family member is quarantined. The U.S. is one of the only industrialized countries in the world that does not have national requirements for paid sick leave.

Fiscal Policies to Address COVID-19 – Mcbride – Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases said on Meet the Press this morning:“early on, there were some missteps” … “But right now I believe 1.1 million tests have already been sent out. By Monday there’ll be an additional 400,000.” See the entire interview with Dr. Fauci here: Fauci: Those ‘vulnerable’ to coronavirus should limit travel and crowd exposure (second video is full interview). Listen to his comments on testing! (first couple of minutes). Dr. Fauci is transparent, honest and factual. Test kits are just one part of the equation on testing. We also need testing capacity. Tests need to be ubiquitous, and free for all. Medicare is already paying for the tests, and most insurance companies have said they will pay for the tests. The Federal Government needs to step up and pay for the tests for the uninsured (with no citizenship requirement).Currently qualifying for a test is too restrictive (due to the lack of test kits and capacity). It should be easy to qualify (those that have symptoms, or close contact with someone with COVID-19, or healthcare workers and first responders, or staff at retirement communities and those that frequent those communities should all be able to obtain tests on demand). On fiscal policy:

1) The Federal Government should immediately announce that tests are free for the uninsured.

2) For those that test positive (but don’t need hospitalization), the experts should determine how to isolate them. If their employers will not pay for their time off, then the government should pay. We don’t want people avoiding tests because of the costs or the fear of lost income.

3) Sick people should not go to work. If the company does not pay for sick leave, the Government could have a program of sharing part of the sick leave (say 50% with the company). This is important for part time workers. Companies like Trader Joe’s have already announced that part time employees can take sick leave.

4) We need to proactively expand unemployment insurance. (Note: There would be triggers for this program, so if we get lucky, and COVID-19 is seasonal, then this program would have minimal fiscal impact.) The idea is to increase the amount paid (based on various triggers) and to include parents with school closures (to help with child care).

4a) Based on certain triggers, the Federal Government would pay an additional 60% of whatever the state is paying for unemployment insurance (if the state is paying $300 per week, the Federal government would add $180 per week). (Note: The 60% is just an arbitrary number). The requirement that people are looking for work would be waived (this is not a financial issue – it is a health issue)

4b) On school closures, the Federal Government would pay a parent both the state share and the 60% extra. School closures are easy to verify. There should be a “reduction in hours” clause, so a person can keep working during a school closure, and still receive some benefits.

4c) There should be a provision to extend the benefits (entirely paid by the Federal government) if the crisis is still ongoing.

Trump administration overrode CDC recommendation that elderly, at-risk populations not fly: AP —The White House this week batted down a recommendation from health officials that elderly people and those who are “physically fragile” not fly on commercial airplanes, an unnamed official with direct knowledge of the situation told The Associated Press. The AP reported that the Centers for Disease Control and Prevention (CDC) submitted a plan this week with the recommendation as a way to control the spread of the virus. However, administration officials reportedly ordered that particular provision of the plan be removed, according to the federal official. The Trump administration has since then suggested that those who are most susceptible to the virus not travel but, according the news source, has “stopped short of stronger guidance” laid out by the CDC. The official in question spoke to the AP on condition of anonymity, as they were not authorized to speak about the matter. The federal official’s revelation comes as the disease continues to spread across the country, with cases now confirmed in Washington, D.C., Maryland and Virginia.The news also comes as Vice President Pence on Saturday spoke after meeting with representatives from the cruise ship industry, a section of the travel industry that has been in the news most recently due to the outbreak. The vice president was assigned as leader of the administration’s coronavirus task force and is in charge of messaging and media relations concerning the status of the virus response. Pence reportedly “narrowed” his focus when he spoke about precautions for certain populations, noting that “older people with serious health problems” should “practice common sense and avoid activities including traveling on a cruise line.”

Trump’s focus on coronavirus numbers could backfire, health experts say – (Reuters) – President Donald Trump loves numbers, and the ones he believes illustrate his accomplishments – an unemployment rate at a 50-year-low and stock markets at record highs – have become touchstones in his speeches, rallies and Twitter missives. The numbers in the coronavirus outbreak in the United States are increasingly not going his way, but that has not stopped him from portraying them largely as a sign of success. The United States had almost 550 confirmed cases of the respiratory virus as of Sunday night and 22 related deaths. The count could rise sharply as testing increases this week. More than 3,600 people have died globally. From suggesting more optimistic time lines for a potential vaccine than scientists say is possible, to contradicting public health officials on the potential for cases to increase, to questioning the fatality rate cited by the World Health Organization, Trump has sought to present figures related to the virus that appear more favorable than reality. While praising his team’s work to combat the virus, the president, who is seeking re-election in November, has repeatedly cited the relatively low number of infected individuals in the United States as proof of the success of his early ban on foreign nationals flying in from China – where the coronavirus originated – compared with actions taken in other countries with higher numbers of cases. Critics say Trump’s representation of the numbers related to the spread of the disease is complicating the government’s response. “The focus on the numbers for numbers’ sake just exposes … they’re not looking around the next corner here,” said Lisa Monaco, a former homeland security adviser to former President Barack Obama. “They’re not preparing the public for what is going to be a substantial spike in the number of cases that we see.”

Trump: ‘Fake News Media,’ Democrats working to ‘inflame the CoronaVirus situation’ –President Trump in an early morning tweet on Monday accused the “Fake News Media” and Democrats of trying “to inflame” the coronavirus outbreak as the virus spreads globally and across the U.S. “The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant,” Trump tweeted. “Surgeon General, ‘The risk is low to the average American,’” Trump added. It’s unclear exactly what prompted Trump’s tweet.Many lawmakers on both sides of the aisle have issued calls for putting politics aside as the nation grapples with the outbreak. More than 500 cases have been confirmed in the U.S., and multiple people have died from the virus, mostly in Washington state. At least eight states have declared states of emergency due to the outbreak, including Oregon, which announced its state of emergency Sunday after its number of cases doubled to 14. Trump administration officialssought to ease fears in a series of appearances on Sunday morning talk shows, but some Democrats have questioned the administration’s response. Despite Trump’s claim last week that anyone who needs a test can get one, Sen. Chris Murphy (D-Conn.) said that’s not the case in his state.Issues over available tests make it difficult to assess the scope of the epidemic, Murphy said Sunday on CBS’s “Face the Nation.” Surgeon General Jerome Adams said on CNN’s “State of the Union” that the nation is entering a so-called mitigation phase and people should not panic even as more cases appear.

White House under pressure to boost coronavirus fight as stocks plunge – U.S. President Donald Trump, who has repeatedly played down the threat posed by the flu-like virus sweeping the globe, was planning to meet with Treasury Secretary Steven Mnuchin and other members of his economic team to weigh possible action, an administration official told Reuters. Paid sick leave is among policy steps being considered, the official said on condition of anonymity. One camp in the White House, which includes Trump, backs an across-the-board payroll tax cut, said an economist advising the administration, while top White House economic adviser Larry Kudlow and others advocate specific tax credits, loans or direct subsidies to certain industries or hard-hit areas. Florida health officials said all people returning from China, Iran, South Korea and Italy must isolate for 14 days while travelers from other countries affected by the outbreak should monitor their health. The number of confirmed U.S. cases reached 566, including 22 deaths, according to state public health authorities and a running national tally kept by the Johns Hopkins University. Thirty-four U.S. states and the District of Columbia have reported to the U.S. Centers for Disease Control and Prevention (CDC) infections of the respiratory illness COVID-19 that can lead to pneumonia. Louisiana had the state’s first presumed coronavirus case, Governor John Bel Edwards announced on Monday.

Trump vows ‘major’ steps to aid U.S. economy amid coronavirus rise – (Reuters) – President Donald Trump on Monday said he will be taking “major” steps to gird the economy against the impact of the spreading coronavirus outbreak and will discuss a payroll tax cut with congressional Republicans on Tuesday. “We’ll be discussing a possible payroll tax cut or relief, substantial relief, very substantial relief, that’s a big number,” Trump told reporters. He did not provide details but said a news conference will be held on Tuesday. Vice President Mike Pence said the administration was consulting Congress on providing paid sick leave to workers, an idea that Democrats already have been trying to advance. The stepped-up response to the coronavirus came as the number of confirmed cases in the United States hit 605, according to Johns Hopkins University. Three additional deaths in Washington state, according to local officials, brought the total nationwide to 25. Earlier Monday, Johns Hopkins said that worldwide, there are 113,584 cases, with 3,996 deaths, the majority in China. The Trump administration moves came as stock markets plunged and top health officials urged some people to avoid cruise ships, air travel and big public gatherings. The administration was planning to huddle in coming days with executives of the banking, hospital and health insurance industries. While an across-the-board payroll tax cut has been under discussion, top White House economic adviser Larry Kudlow and others have advocated specific tax credits, loans or direct subsidies to certain industries or hard-hit areas. A payroll tax cut could encourage consumer spending and help households that might otherwise struggle to make rent and mortgage payments on time or pay medical bills if family members’ work hours are reduced during the coronavirus outbreak.

Trump Floats Payroll Tax Cut After Market Plunged on Virus Fears – President Donald Trump said Monday he will seek a payroll tax cut and “very substantial relief” for industries that have been hit by the virus, reversing course on the need for economic stimulus hours after markets posted their worst losses in more than a decade. Trump, speaking at a White House news conference, said that he plans to announce “very dramatic” actions to support the economy at a press conference on Tuesday following discussions with lawmakers. “I will be here tomorrow afternoon to let you know about some of the economic steps, which will be major,” Trump said. Members Of The Coronavirus Task Force Hold Press Briefing Donald Trump speaks during a news conference in Washington, D.C. on March 9.Photographer: Stefani Reynolds/Bloomberg Trump said he wants to help hourly wage earners who could lose pay by staying home “so they don’t get penalized for something that’s not their fault.” Pressure has been growing on Trump to take more decisive action in response to the coronavirus, as the number of cases in the U.S. and worldwide continues to grow. U.S. stocks plunged more than 7.5% on Monday — the worst day on Wall Street since the financial crisis — as a full-blown oil price war rattled financial markets already on edge over the outbreak. Trump’s statement marks a reversal from his administration’s recent position on the need for economic stimulus. Last week, Treasury Secretary Steven Mnuchin said the administration isn’t considering a payroll tax cut as part of its response to the coronavirus. He added that the virus sell-off isn’t comparable to the financial crisis a decade ago. “We will get through this,” he told reporters on Mar. 3. Market swings are happening because “the markets struggle to assess new risks.” It’s unclear whether the plans being discussed at the White House will be enough to stem the sell-off as the private sector, particularly airlines and cruise companies, clamor for more relief.

White House plan for economic response to coronavirus is ‘not there right now,’ officials say – The White House is not ready to roll out specific economic proposals in its response to the widening impact of the coronavirus outbreak, administration officials told CNBC. The revelation comes as U.S. stock futures pointed toward a sharp rebound at the open Tuesday following the Dow’s 2,013-point drop Monday and President Donald Trump’s suggestion that a payroll tax cut and other stimulus measures may be in the works to mitigate economic damage from the virus’ spread. Trump has also invited Wall Street executives to meet at the White House on Wednesday to discuss the response. However, inside the administration, some officials were stunned by Trump’s claim Monday that he would hold a press conference Tuesday to announce an economic plan. “That was news to everyone on the inside,” one official said. The actual details of any plan remain up in the air. “It’s not there right now,” an official said. “A lot of details need to be worked out.” The president’s schedule for Tuesday includes a 5:30 p.m. ET media briefing for his coronavirus task force. In addition to the potential payroll tax cut, which faces skepticism from Senate Republicans, Trump also said the administration would work with travel industry players, such as airlines and cruise lines, as travel restrictions and fears stemming from the outbreak take a toll on them. American Airlines on Tuesday, for instance, slashed international and domestic flights as demand craters. Wage relief for hourly workers is also under discussion, but it would require big federal spending and there are no details about how such a policy would work, an official said. The officials cited in this story declined to be named since plans were still being worked out. Trump on Friday signed an $8.3 billion spending package aimed at supporting states and researchers. Treasury Secretary Steven Mnuchin and Larry Kudlow, the president’s top economic advisor, are slated to head to Capitol Hill on Tuesday to brief Senate Republicans on some ideas and try to get a sense of what is possible. “The president has a strong point of view, and he’s looking forward to Senate reaction to that perspective,” a senior administration official said.

Trump Tries to Counter Economic Damage From Coronavirus -Rattled by Monday’s historic decline in the stock market, U.S. President Donald Trump is proposing a slate of measures to help contain the economic fallout of the coronavirus, which is sparking fears of recession from Japan to Europe and even in the United States. But the administration’s preferred remedies will face both an uphill fight in Congress and doubts over how effective they would be. After markets closed up Tuesday on hopes of some kind of fiscal stimulus, the Trump administration presented a vague combination of proposals that might include another tax cut (this time of the payroll tax), combined with paid sick leave and other support for hourly workers. Reports indicated that Trump ispushing for a total elimination of the payroll tax through the end of the year, which would cost about $900 billion and would be larger than the Obama-era stimulus in the wake of the financial crash.But a day after promising “very major” economic relief, the president had little to say following a midday meeting with Republican senators. “I was just with the Republican senators and they were just about all there, mostly all there and there’s a great feeling about doing a lot of the things,” he told reporters.Other options could include loan support for cash-strapped businesses hit particularly hard by the virus; one idea gaining traction is a federal bailout for oil and gas producers struggling under the oil-price warunleashed by the virus, in addition to government aid for industries such as travel and hotels that have suffered a drop in business as the outbreak has grown.And, true to form, Trump has also continued to pressure the Federal Reserve to further cut interest rates – the central bank already slashed the prime lending rate by half a percentage point in an emergency move last week – to kickstart an economy that by some indicators is looking wobbly. In the end, whatever economic medicine Washington comes up with to battle the effects of the COVID-19 outbreak will be largely determined by Congress – especially the Democrats, who control the House.

Trump Wants Coronavirus Bailout For Oil and Hotel Industries – Yesterday evening, President Trump held a press conference and announced he would soon unveil an aggressive plan to head off a recession. “I will be here tomorrow afternoon,” he promised, “to let you know about some of the economic steps we’re taking, which will be major.”This announcement “stunned” Trump’s own advisers, who had not yet figured out what the plan is going to be, reports Eamon Javers. But the press conference had been announced, so Trump’s advisers have been scrambling to backfill their boss’s promise of a “very substantial,” “very major,” “very dramatic” plan.At his press conference, Trump mentioned a few possibilities for what this package might include. One item is a bailout for owners of hotels. “We’re also talking to the hotel industry. And some places, actually, will do well, and some places probably won’t do well at all. But we’re working also with the hotel industry.” By the way, did you know that the Trump Organization is in the hotel field? Weird coincidence. In fact, it’s possible the people in the hotel industry the president is talking to about giving a federal bailout might even include members of his own family. Today more details of Trump’s hastily emerging plan have leaked out. The Washington Post reports Trump is “strongly considering a bailout for oil and gas producers.” The president and his advisers “have been taking calls since Monday from concerned energy sector allies.” You might wonder what the energy sector has to do with the coronavirus. The answer is, almost nothing! They’re in trouble because Russia and Saudi Arabia are ramping up production and cutting into their market share. This move is a benefit to consumers, who will enjoy cheaper energy prices, which will help offset some of the contractionary hit from the slowdown. Of course, cheap energy is the primary rationale for the Republican Party’s refusal to do anything about climate change or air pollution. Yet now, Trump wants to backstop that industry with a check from the taxpayers. Where is the logic? The Post notes, “One of the companies hardest hit was Continental Resources, founded by Harold Hamm, a Trump supporter and an adviser to the president on energy issues.” Ah, well, that explains it: Trump’s supporters are also advising him, and perhaps their advice is not being offered at a fully arm’s-length distance from their narrow interests.

Getting serious about the economic response to COVID-19 — EPI Blog by Josh Bivens – With the stock market plummeting and hysteria around COVID-19 (commonly known as the coronavirus) escalating, it is time to get serious about the economic policy response. Policymakers and the public will need help in distinguishing between smart responses and those that are just ideological opportunism, such as calls for cuts in taxes and regulations, for example.Simply put, smart responses must be tailored to the type of recession the outbreak could cause if policymakers didn’t act. Below I sketch out why these characteristics of the COVID-19 slowdown are likely, and what a tailored response to each would be. First, if the COVID-19 outbreak slows the economy, it could happen very rapidly. This is quite different, for example, than the onset of the Great Recession. That recession was caused by the bursting of the home price bubble, which essentially began in mid-2006. From that point on the recession was near-inevitable, but it took literally years to gather steam. A COVID-19 driven recession would be quite different in that it would hit quickly. The spread of the disease has been quite rapid in each country it has affected. Further, the public health response to maintain “social distancing” to thwart its spread tends to take effect rapidly as well. Even before the reported cases in the U.S. have reached large numbers the news are full of cascading cancellations of business and entertainment gatherings. We are almost certainly already feeling the economic effects of the COVID-19 slowdown – it just has not appeared in economic statistics yet (since these statistics tend to appear with a small lag).Second, the sectors that will be first hit by “social distancing” measures disproportionately employ low-wage workers. Traditionally, manufacturing and construction – two comparatively high-paid industries – have been the first to dip in recessions. COVID-19 will be different. The sectors that will be directly affected by “social distancing” – restaurants, retail (excluding online), and personal services, for example – are sectors with lower wages than average. Crucially, workers in these sectors also have low rates of paid sick leave. Between low-pay and lack of access to sick leave and health insurance coverage, these workers on the economic front lines of COVID-19 will need lots of help quickly. Third, many of the public health interventions that will be undertaken in the coming weeks will be done by state and local governments. Further, state and local government spending predictably becomes a powerful anti-stimulus whenever the overall economy is hit by a negative shock. Negative economic shocks reduce income and spending, which in turn reduces income and sales tax revenues collected by state and local governments. Because these governments have to balance operating budgets, this decline in tax collections tends to spur spending cutbacks, which powerfully drag on economic growth. This dynamic was a key reason why recovery from the Great Recession took so long.

Has Dr. Anthony Fauci made Trump irrelevant to the coronavirus crisis? –Throughout his presidency, Donald Trump has ignored, disputed, belittled or silenced experts. He rejected the conclusions of his intelligence agencies about Russian interference in American elections; mocked climate change scientists by calling for “good old-fashioned Global Warming” during a freezing snowstorm; and overrode the hurricane forecasts of the National Weather Service. “The experts are terrible,” Trump once said. “Look at the mess we’re in with all these experts that we have.” But in the coronavirus outbreak, Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, has shown that without experts we would all be in a mess. When it comes to explaining the coronavirus to the American public, Dr. Fauci, the nation’s leading expert on infectious diseases, is everything that Trump is not. He explains medical issues in an understandable way, but without sacrificing scientific precision; he neither exaggerates the effectiveness of the administration’s response nor understates the threat coronavirus poses; and by being calm, focused, and competent, Dr. Fauci re-assures people that we will get through this. Most of what Trump has said about the coronavirus ranged from incoherent to exaggerated, if not false, to plain silly. He insisted two weeks ago that the coronavirus was “very much under control in the USA” and that the cases “were going very substantially down, not up.” None of it was true, and in fact coronavirus cases have increased almost fifteen fold since then. Trump appeared to suggest that people with coronavirus should go to work. He expressed a preference for keeping Americans with the coronavirus at sea on a cruise ship in order to keep the coronavirus numbers in the United States down, which might in his mind help him politically but certainly wouldn’t do those Americans any good. His idea of re-assuring the public is to tell them “there’s a very good chance you’re not going to die.” In case anyone doubts his medical competence, Trump claims that he has “natural” scientific ability due to a “great, super-genius uncle.” In the face of this craziness, Dr. Fauci has accomplished two remarkable feats for a government expert. First, he has rendered Trump largely irrelevant to the public’s understanding of the crisis. It may be one measure of Dr. Fauci’s credibility with the American people that, according to a recent Quinnipiac poll, while 53 percent of the public have confidence in the federal government’s ability to handle the coronavirus crisis, only 43 percent approve of Trump’s response. Dr. Fauci may have turned Trump’s bizarre commentary on the coronavirus into background noise.

Fauci ‘Optimistic’ Coronavirus Testing System Will Be Fixed Within ‘The Next Week Or Two’ – Director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, says he is ‘optimistic’ that the ongoing bottlenecks delaying coronavirus testing will be fixed. Fauci acknowledged to ABC News that the government needs to do better to meet the flood of demand as COVID-19 begins to blanket the country. “I mean, we have to admit that in the beginning we didn’t have what we needed, but now we will fix it,” he said. According to Fauci, the earlier testing methods were ‘working’ during the initial outbreak, however the coronavirus task force led by Vice President Mike Pence is on track to provide a better system quickly. “It’s going to be within the next week or two — probably even more like a week,” he said. Fauci said that the diagnostic test used by the World Health Organization (WHO) wasn’t used because the US test was “one that had been working, and working well for the system that was involved.”

Ted Cruz to stay at home this week after interacting with coronavirus patient –Sen. Ted Cruz (R-Texas) said Sunday that he shook hands with a man now confirmed to be infected with the novel form of coronavirus during a recent interaction at the Conservative Political Action Conference (CPAC).In a news release Sunday evening, Cruz said that based on medical advice he had received, he did not believe there was any current risk of him developing the disease, which has already infected more than 100,000 people globally.”Last night, I was informed that 10 days ago at CPAC I briefly interacted with an individual who is currently symptomatic and has tested positive for COVID-19. That interaction consisted of a brief conversation and a handshake,” Cruz said.”I’m not experiencing any symptoms, and I feel fine and healthy. Given that the interaction was 10 days ago, that the average incubation period is 5-6 days, that the interaction was for less than a minute, and that I have no current symptoms, the medical authorities have advised me that the odds of transmission from the other individual to me were extremely low,” he added.”The physicians further advised that testing is not effective before symptoms manifest, and my brief interaction with the individual does not meet the CDC criteria for self-quarantine,” he added.Nevertheless, Cruz said he will remain at his home in Texas this week “out of an abundance of caution.”The GOP senator’s statement comes a day after CPAC officials announced that an attendee of the conference had tested positive for the virus, which has killed a handful of people in the U.S. and thousands more around the world, with the majority of deaths occurring in mainland China, where the virus is believed to have originated.

These are the 6 members of Congress taking steps to isolate themselves amid coronavirus threat – As lawmakers on Capitol Hill grapple with how to contain the spread of coronavirus across the United States, six members of Congress are now taking steps to either self-quarantine or otherwise isolate themselves as a precaution after coming into contact with an infected individual.Five Republican lawmakers are self-quarantining after interacting with an individual at the Conservative Political Action Conference who has tested positive for coronavirus. Separately, one Democratic congresswoman announced on Monday that she and her staff are now working remotely after finding out that she recently came into contact with someone who tested positive. Republican Sen. Ted Cruz of Texas announced on Sunday that he had been notified that he was in contact with an individual at CPAC who tested positive and is showing symptoms. In a statement, Cruz said that “the interaction consisted of a brief conversation and a handshake.” Cruz said that he is “not experiencing any symptoms, and I feel fine and healthy,” and that “medical authorities have advised me that the odds of transmission from the other individual to me were extremely low.” A message posted to Florida Republican Rep. Matt Gaetz’s Twitter account on Monday stated that the congressman found out on Monday that he came into contact with an individual at CPAC who had tested positive. Gaetz rode on Air Force Once with President Donald Trump on Monday and spent the weekend at Trump’s Mar-a-Lago property. Republican Rep. Doug Collins of Georgia announced on Monday that CPAC contacted him to tell him that a photo of him and the conference attendee who tested positive had been found, indicating they interacted.”While I feel completely healthy and I am not experiencing any symptoms, I have decided to self-quarantine at my home for the remainder of the 14-day period out of an abundance of caution,” Collins said in a statement. Republican Rep. Paul Gosar of Arizona put out a statement on Sunday saying that he was similarly notified that during CPAC he was in contact with an individual who had tested positive. Democratic Rep. Julia Brownley of California put out a statement on Monday saying that she has been informed that “an individual I met with last week in DC tested positive for COVID-19.” “I have decided to close our DC office for the week,” the congresswoman said, adding, “My staff and I are working remotely.”

House Democrats jam GOP with coronavirus bill –President Trump met with close to a dozen chiefs of the largest U.S. banks and their advocates in Washington, D.C., as the financial sector faces pressure to prepare for an economic slowdown driven by the coronavirus outbreak. Trump huddled with several of the CEOs of the biggest American commercial and investment banks Wednesday, including Michael Corbat of Citigroup, Bryan Moynihan of Bank of America, Charles Scharf of Wells Fargo and David Solomon of Goldman Sachs. Gordon Smith, co-president of JPMorgan Chase, attended the meeting on behalf of the largest U.S. bank as CEO Jamie Dimon recovers from heart surgery. American Bankers Association President Rob Nichols and Consumer Bankers Association President Richard Hunt, and Independent Community Bankers of America President Rebeca Romero Rainey attended the meeting on behalf of the their trade groups representing the vast majority of U.S. retail banks. Stephen Schwartzman, CEO of investment firm BlackStone; Ken Griffin, chief executive of hedge fund Citadel; Truist Financial chief executive Kelly King; and US Bancorp chief executive Andrew Cecere also attended the meeting, which included Treasury Secretary Steven Mnuchin, White House economic adviser Larry Kudlow, senior adviser Jared Kushner and Small Business Administration chief Jovita Caranza. Trump called the meeting of top U.S. bankers to explore ways to support small and midsize businesses likely to suffer steep declines in revenue throughout the coronavirus outbreak, according to industry sources. As the number of confirmed coronavirus cases in the U.S. exceeds 1,000, states and cities have taken drastic measures to slow the spread of the potentially fatal respiratory illness. Canceled events, bans on large gatherings and social distancing efforts are likely to dampen consumer spending, a dire blow to businesses with small staffs and tight margins. The bankers and industry advocates meeting with Trump on Wednesday highlighted efforts to help customers facing hardships by easing fees, delaying deadlines and offering flexibility with the terms of their accounts and loans. Corbat and several fellow bank CEOs also stressed that their companies were well equipped to handle any economic downturn caused by the virus. “This is not a financial crisis,” Corbat told Trump and reporters ahead of the meeting.

Senate Democrats call on Trump to consider disaster declaration –Senate Democrats are urging President Trump to immediately consider a disaster declaration to respond to the coronavirus outbreak. Doing so would allow the Federal Emergency Management Agency (FEMA) to utilize $42 billion available in the disaster relief fund to assist state and local governments in mitigating the spread of COVID-19. “It is crucial that your administration employ a whole-of-government approach in responding to COVID-19. This includes working closely with state, local, and tribal officials and providing necessary resources to those on the frontlines,” Democrats wrote in a letter to Trump Wednesday. “We strongly urge FEMA to stand ready to provide emergency protective measures to prevent and mitigate the spread of disease, save lives, and protect public health and safety, should any state request assistance,” they added. The letter is signed by Senate Minority Leader Chuck Schumer (D-N-Y.) and 35 Senate Democrats. Trump is scheduled to deliver a statement Wednesday in the Oval Office at 9 p.m. ET regarding the crisis. The administration is said to be considering a national emergency declaration to free up additional resources to fight the coronavirus. A spokesperson for the White House was not immediately available for comment in response to the Democrats’ letter.

Coronavirus Live Updates: U.S. Will Suspend Travel From Europe as Countries Tighten Lockdowns – President Trump announced on Wednesday night that he was taking “strong but necessary” actions to keep new cases of the coronavirus from entering the United States by suspending all travel from Europe for 30 days, beginning on Friday. The restrictions do not apply to Britain, he said.Speaking from the Oval Office, Mr. Trump called the coronavirus a “horrible infection” and said he was addressing the nation to talk about the “unprecedented response to the coronavirus outbreak.” The president also said health insurance companies had agreed to extend insurance coverage to cover coronavirus treatments as well as waive related co-payments. Mr. Trump added that he planned to soon announce emergency action to provide financial relief for workers who fall ill or need to be quarantined. He said he would ask Congress to take legislative action to extend that relief but did not detail what that would be. He said he would instruct the Treasury Department to “defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.” The president, sitting behind the Resolute Desk with his arms crossed, finally appeared to be acknowledging the severity of the virus, calling it a “horrible infection” and acknowledging that Americans should cut back on travel that was not necessary. It signaled a break from the business-as-usual attitude he had been trying to project as recently as Tuesday, when he urged Americans to “stay calm” and said the virus would soon go away. But Mr. Trump continued to anticipate a fast end date to the spread of the coronavirus, even as medical experts have warned that the pandemic will worsen. “This is not a financial crisis,” he said. “This is just a temporary moment in time that we will overcome as a nation and a world.” Financial markets tumbled again Wednesday as policymakers on both sides of the Atlantic appeared unwilling or unable to mount an aggressive response to the economic threat posed by the virus.The S&P 500 fell nearly 5 percent on Wednesday, erasing its gains on Tuesday. The index is now down 19 percent from its high on Feb. 19. “If the Trump administration and Congress can’t get it together quickly and put together a sizable and responsible package, then a recession seems like a real possibility here,” said Mark Zandi, chief economist for Moody’s Analytics.The economic damage from the global pandemic is only beginning to emerge from disruptions in supply chains, travel and entertainment, worsened by a price war in the oil industry. In Europe, major indexes in Frankfurt, London and Paris fell, giving up early gains that had come after the Bank of England said it would cut interest rates to help British businesses. Shares in Asia also fell. The spread of the coronavirus across more than 100 countries now qualifies as a global pandemic, World Health Organization officials said on Wednesday, confirming what many epidemiologists have been saying for weeks. In 2010, it defined a pandemic as “the worldwide spread of a new disease” that affects large numbers of people. The C.D.C. says it is “an epidemic that has spread over several countries or continents, usually affecting a large number of people.”

Trump stops flights from Europe, global alarm over coronavirus spreads – (Reuters) – Travelers scrambled to rebook flights and markets reeled on Thursday after U.S. President Donald Trump imposed sweeping restrictions on travel from Europe, hitting battered airlines and heightening global alarm over the coronavirus. But China, where the disease originated, said its epidemic had peaked and the global spread could be over by June if other nations applied similarly aggressive containment measures as Beijing’s communist government. Trump had downplayed risks to the United States during the crisis, but with epidemics ballooning from Iran to Italy and Spain, he limited travel from continental Europe for 30 days. “This is the most aggressive and comprehensive effort to confront a foreign virus in modern history,” he said in a prime-time televised address from the Oval Office on Wednesday. Markets went into a tailspin, with European shares plunging to their lowest in almost four years and oil slumping. U.S. stock indexes lost another 7 percent and triggered an automatic cutout shortly after the opening bell. The European Central Bank approved fresh stimulus measures, including ultra-cheap loans, to help the ailing euro zone economy but unexpectedly kept interest rates on hold. Trump’s move also sent weary and confused travelers rushing to airports to board the last flights back to the United States. “It caused a mass panic,” said 20-year-old Anna Grace, a U.S. student at Suffolk University on her first trip to Europe, who rushed to Madrid’s Barajas airport at 5 a.m. to get home. The outbreak has disrupted industry, travel, entertainment and sports worldwide, even throwing the Tokyo Summer Olympics into question.

Trump’s travel ban sidesteps his own European resorts – President Donald Trump’s new European travel restrictions have a convenient side effect: They exempt nations where three Trump-owned golf resorts are located. Trump is already under fire for visiting his properties in both countries as president, leading to U.S. taxpayer money being spent at his own firms. The president has been saddled with lawsuits and investigations throughout his term alleging that he’s violating the Constitution’s emoluments clause by accepting taxpayer money other than his salary. The U.S. government proclamation initiating the ban targets 26 European countries that comprise a visa-free travel zone known as the Schengen Area. The United Kingdom, which is home to Trump Turnberry and Trump International Golf Links, and Ireland, which is home to another Trump-branded hotel and golf course at Doonbeg, do not participate in the Schengen Area. Bulgaria, Croatia and Romania are also not part of the Schengen Area. All three of the resorts are struggling financially. Ireland’s prime minister, Leo Varadkar, is scheduled to meet Trump at the White House on Thursday in one of the few events related to St. Patrick’s Day that has not been canceled due to coronavirus concerns. The administration’s European travel proclamation notes that “the Schengen Area has exported 201 COVID-19 cases to 53 countries. Moreover, the free flow of people between the Schengen Area countries makes the task of managing the spread of the virus difficult.” Trump’s European travel ban comes with several other loopholes. Though they are subject to border checks on arrival, residents of the 26 Schengen Area countries are also free to live and work in the United Kingdom, meaning they could fly to the United States from a British airport as long as they hadn’t spent time within the Schengen countries in the last 14 days.

Read Trump’s coronavirus Oval Office address – Politico This is a transcript of the president’s Wednesday night address. (video).

Trump’s Coronavirus Speech Reaction The American Conservative -Bad parts:

• He looked and sounded unwell
• I don’t suppose I’m opposed to the European travel restrictions, but it’s much too late for that to do measurable good. They would have made a lot more sense two weeks ago. And exempting Britain from this ban is senseless. It sounded like he’s trying to frame the virus as an external threat. But it’s already here, and it’s rapidly spreading. This seemed more rhetorical than anything else – Trump trying to reinforce his image as a nationalist looking out for American interests
• He spoke much more about economic relief than public health concerns
• He spent far too much time and effort trying to defend his administration’s response, and no time speaking more directly to people who – encouraged by him and his media coterie – have spent the last few weeks minimizing the seriousness of all this
• He said little or nothing about testing, which we are still not able to do. No real talk about social distancing
• He did not declare a state of national emergency, which would have helpful policy and legal effects at the state level
• He said nothing about the critical-care crisis facing hospitals. I have found that this is a point that is not widely understood by the general public: that even if only a relatively small number of people are ultimately going to die from this virus, it stands to overwhelm our hospitals. This is why it is so very important for everybody to practice social distancing and the rest: to slow the rate of infection, and give our health care system the chance to cope. It is beyond comprehension why he didn’t make this clear to listeners tonight. I’ve had a number of conversations these past few days with people who aren’t following the story closely, and they are entirely unaware of this fact. The president blew an opportunity to explain that to the nation
• Watching him, I realized the cost of a president having pissed away his authority these past three years, with his daily juvenile tweets and schoolyard rhetoric. The country needs a president now who can inspire, galvanize, and lead. Tonight I saw a president who looked tired, afraid, and completely unconvincing. He ended by calling for an end to partisanship, and the nation coming together to fight this threat. That’s what any president should do in his position, in a moment of great national crisis. It is difficult to imagine a president with less credibility to make that ask

Analysis: Facing virus outbreak, Trump’s tactics fall short (AP) – The escalating coronavirus crisis is presenting President Donald Trump with a challenge for which he appears ill-equipped, his favorite political tactics ineffective and his reelection chances in jeopardy.A rare crisis battering the White House that is not of the president’s own making, the spreading coronavirus has panicked global financial markets and alarmed Americans, many of whom have turned to the Oval Office for guidance and reassurances. But what they have found is a president struggling for a solution, unable to settle Wall Street and proving particularly vulnerable to a threat that is out of his control.In an address to the nation Wednesday night, Trump announced a sweeping travel ban for much of Europe as well as a package of proposals to help steady the teetering economy. But he continued to play down the severity of the situation, painting it as a foreign threat that soon will be banished rather than focusing on managing the growing number of cases at home.“This is the most aggressive and comprehensive effort to confront a foreign virus in modern history,” Trump declared.Addressing the economic costs, he added, “This is not a financial crisis, this is just a temporary moment of time that we will overcome together as a nation and as a world.” But the virus has appeared impervious to the Republican president’s bluster.The virus does not have a Twitter account and, unlike so many previous Trump foes, is resistant to political bullying or Republican Party solidarity. It has preyed on his lack of curiosity and fears of germs while exposing divides and inadequacies within senior levels of his administration. It has taken away Trump’s favorite political tool, his rallies, from which he draws energy and coveted voter information.And eight months from Election Day, it has endangered his best reelection argument – a strong economy – just as Joe Biden, the candidate emerging from the Democratic field, seems poised to take advantage of a political landscape upended by the virus.

Inside the Oval Office, a Fierce Fight Over Trump’s Virus Speech -Donald Trump sat in the Oval Office Wednesday before the biggest speech of his presidency, listening to his aides argue about whether barring Europeans from traveling to the U.S. would trigger a global depression.The medical experts on his team were adamant: The best way to slow the spread of the novel coronavirus was to buy time by keeping Europeans out, they said, with the hope the virus may naturally ebb in the warmer weather, according to people familiar with the deliberations. Treasury Secretary Steven Mnuchin and Larry Kudlow, the president’s top economic adviser, pushed back strongly, saying the economic cost would be steep.Trump let them go on for a bit, then had heard enough. He dispatched some of the advisers into the nearby Cabinet Room and told them to come back with a plan they could all stand behind, said two of the people, who like others asked for anonymity to describe internal deliberations. When they returned with almost everyone endorsing the travel restrictions, Trump agreed to do a prime-time address to tell the nation.His aides now see this moment as the most crucial of Trump’s presidency, the time when voters will decide whether he deserves re-election. “We’re going to win or lose right here,” one said. Another said that if the stock market is lower than when Trump took office, it would shatter his claim to being the one person who can keep the economy on track.If that’s truly the measure voters will use, Trump’s speech Wednesday did little to win their confidence or to win himself a second term.The S&P 500 plunged nearly 10% on Thursday, chalking up its worst loss since the crash in 1987, even after the Federal Reserve took aggressive steps by flooding the market with liquidity and widening its purchases of U.S. government securities.

How Trump Made America Far Less Prepared For Coronavirus – Just over a year ago, the Office of the Director of National Intelligence sounded alarms about America’s vulnerability to a major public health crisis. “We assess that the United States and the world will remain vulnerable to the next flu pandemic or large scale outbreak of a contagious disease,” the DNI reported in January 2019, “that could lead to massive rates of death and disability, severely affect the world economy, strain international resources, and increase calls on the United States for support.”But Donald Trump put his head in the sand. After slashing federal pandemic response teams and kneecapping other public health initiatives throughout his first term, he failed to prioritize the potential for outbreak, declining to devote adequate resources to the looming threat. Now, as the DNI’s grim forecast last year proves correct, the United States’ national security apparatus is scrambling both to address a growing crisis in the country – and, potentially, within its ranks.America’s national security and defense agencies are grappling with how to combat the virus quickly spreading across the globe – and the country – while simultaneously keeping their own staffs safe. But, critics and observers told Politico Thursday, actions by the Trump administration, like the 2018 ouster of Tim Ziemer, the White House’s top pandemic response expert, could make an effective response more challenging. “[Staff shakeups] have had a profound ripple effect, the consequences of which we are seeing play out now, I think,” Ned Price, who served in the CIA and on the National Security Council under Barack Obama during the 2014 Ebola outbreak, told the outlet. As Politico pointed out, Ziemer, who was not replaced; Luciana Borio, the National Security Council’s director for medical and biodefense preparedness; and Tom Bossert, the former Homeland Security adviser who oversaw a since-disbanded global health security team, all were ousted in 2018, shortly after John Bolton joined the Trump White House.“There are directorates that can pick up the slack,” Price said. “But you don’t have the same level of expertise of people who have lived through Ebola, H1N1, and other disease responses.”

Exclusive: White House told federal health agency to classify coronavirus deliberations – sources –(Reuters) – The White House has ordered federal health officials to treat top-level coronavirus meetings as classified, an unusual step that has restricted information and hampered the U.S. government’s response to the contagion, according to four Trump administration officials. The officials said that dozens of classified discussions about such topics as the scope of infections, quarantines and travel restrictions have been held since mid-January in a high-security meeting room at the Department of Health & Human Services (HHS), a key player in the fight against the coronavirus. Staffers without security clearances, including government experts, were excluded from the interagency meetings, which included video conference calls, the sources said. “We had some very critical people who did not have security clearances who could not go,” one official said. “These should not be classified meetings. It was unnecessary.” The sources said the National Security Council (NSC), which advises the president on security issues, ordered the classification.”This came directly from the White House,” one official said. The White House insistence on secrecy at the nation’s premier public health organization, which has not been previously disclosed, has put a lid on certain information – and potentially delayed the response to the crisis. COVID19, the disease caused by the virus, has killed about 30 people in the United States and infected more than 1,000 people. HHS oversees a broad range of health agencies, including the U.S. Centers for Disease Control and Prevention, which among other things is responsible for tracking cases and providing guidance nationally on the outbreaks.

Trump’s payroll tax cuts are a terrible opening bid to address the economic fallout of COVID-19: But employer tax credits can be part of the economic response if they finance direct benefits for workers –Unconditional tax cuts for employers are a terrible policy response to the economic fallout of COVID-19. But employer tax credits that are tied to the provision of specific benefits for workers can be a useful way to deliver emergency help. In the long run, key benefits like paid sick leave and strong unemployment insurance should not rest on employer tax credits, but these credits might be the best way to deliver emergency benefits right now.The Trump administration has put forward the idea of cutting both employee and employer-side payroll taxes as the centerpiece of an economic response to the COVID-19 epidemic. This is a terrible opening bid. In late 2010, the Obama White House and a Republican-led Congress agreed on a temporary payroll tax cut for employees only as a compromise measure to provide economic stimulus.But the employee-side payroll tax cut is an even worse potential compromise this time. One reason is that it would not get enough money out the door and into households’ pockets quickly enough. A COVID-19 recession will come fast and people will need lots of help quickly. A payroll tax cut will dribble out gradually over time. Another reason is the employee-side payroll tax cut is poorly targeted and sends lots of money to high-income households. A COVID-19 recession is laser-targeted at sectors with lots of low-wage workers, and the response should be too. So, even employee-side payroll tax cuts are a poor centerpiece of any policy package responding to the coming slowdown.Employer-side payroll tax cuts are even much worse. They are a pure windfall to business and would do nothing for workers in the short run. These employer-side cuts should be flatly opposed.There is, however, a potential role for employer tax credits as a way to stand-up emergency paid sick leave or work sharing or unemployment insurance. The optimal way for these programs to work is to have them be an ongoing part of our social safety net that take effect automatically during downturns. In the case of work sharing and unemployment insurance, these should be social insurance programs financed in the long run by payroll taxes. Paid sick leave should be a mandated labor standard. But since we do not have strong systems in place to provide these benefits to workers affected by the economic fallout of COVID-19 in the short run, and because placing new costs on employers just as revenue potentially craters might not be optimal, we could use employer tax credits to finance the emergency provision of key benefits like paid sick leave and expanded unemployment insurance.

Congress pours cold water on Trump’s payroll tax cut –President Trump’s push to cut the payroll tax as part of an effort to revive the economy is facing steep headwinds on Capitol Hill. Trump has spent days making the pitch publicly, as well as privately, as Washington is under growing pressure to try to shore up the stock market, which has plummeted this week over growing concerns about the growing coronavirus outbreak. House Democrats are set to unveil an economic response package that does not include a payroll tax cut. Meanwhile, Senate reactions range from deep skepticism to, in some cases, outright opposition, raising questions about whether a plan could ever reach Trump’s desk. “I know that’s in the conversation … I would prefer they exercise other options before going down that path,” said Sen. John Thune (R-S.D.), the No. 2 Republican senator, while caveating that it’s “too early” to make decisions on legislation. Sen. Mike Braun (R-Ind.) predicted that a payroll tax cut would spark resistance not only from fiscal hawks but a broader swath of the Senate GOP caucus. “I think there are going to be a lot of fiscal conservatives, and I think that’s going to go deeper into the conference than normal,” Braun said, asked about opposition to the idea. “My gut is there’s going to be folks not interested in doing it quickly.” Asked if he was one of those who would be opposed to quickly passing a payroll tax cut, Braun added: “I would be one of them.”

Democrats push for paid leave in coronavirus response – Democrats are pushing to include paid sick and family leave as part of any economic response to coronavirus. The likelihood of enacting at least a temporary paid leave policy went up Tuesday, when President Trump mentioned the issue in his list of possible legislative responses at a GOP Senate meeting. But the details of a paid leave policy remain unclear, and Democratic demands could make Republican support for the policy difficult. “People who aren’t getting paid have trouble making rent, have trouble making their mortgage payment. No one should be evicted or foreclosed upon during this crisis. Paid sick days are one of the most important ways we can do that,” Sen. Sherrod Brown (D-Ohio) said Wednesday. House Democrats were slated to unveil coronavirus legislation Wednesday with provisions on paid leave, nutrition assistance for kids missing school lunches during closures and covering the costs of testing kits. A later package could deal with longer-term economic issues. The White House has yet to formalize its own economic response, but President Trump is set to address the nation Wednesday evening to discuss the coronavirus. His top economic adviser, Larry Kudlow, and Treasury Secretary Steven Mnuchin met with Republicans on the House Ways and Means Committee Wednesday to strategize. Rep. Kevin Brady (R-Texas), the top Republicans on Ways and Means, said the administration was looking at addressing the issue through executive action. “We discussed with Mr. Kudlow the president’s desire to act quickly to deal with the hourly workers and those who have to stay home and may not have salaries while they are quarantined at home,” Brady said. “There are, I think, strong executive actions that can be taken to address that.” But Republicans are also concerned about ensuring businesses don’t buckle as outbreak spreads. “The way I heard it was aimed at small businesses only,” said Sen. Mike Braun (R-Ind.) after a Tuesday meeting between Trump and GOP senators.

Oil lobbyists met with White House staffers to discuss markets amid OPEC price war, coronavirus– Lobbyists representing the oil and gas industry met with White House policy staffers Wednesday morning to discuss coronavirus, the state of the economy and the market, a representative for the American Petroleum Institute told CNBC. The meeting comes as the market has been roiled by fears of coronavirus and deteriorating OPEC talks. After negotiations between OPEC and Russia fell apart on Friday, OPEC’s de facto leader, Saudi Arabia, on Saturday slashed its oil prices and announced plans to increase production. This led to a selloff in oil markets and pressure on U.S. energy producers. Oil prices on Monday plunged 24%, marking the worst day since 1991. Saudi Aramco CEO Amin Nasser said on Wednesday that the company had been asked to supply a record 13 million barrels per day in April. Oil fell 4% Wednesday. Still, the American Petroleum Institute, which represents companies including Halliburton, Hess and Occidental Petroleum, is not seeking federal aid, said the the spokeswoman, Bethany Aronhalt. That statement comes despite reports Tuesday indicating President Donald Trump was considering a federal aid package for the shale industry, potentially in the form of low-interest loans. An official told CNBC that the White House doesn’t want the potential assistance to be perceived as a bailout. White House declined to comment. API CEO Mike Sommers told Bloomberg on Tuesday the group’s focus is on balancing the oil market. “What we have here is a demand shock, of course, because of coronavirus, and a supply shock, because of the decision by Russia and the Saudis to flood the market with oil,” Sommers said. “So, we are concerned about these geopolitical factors that are feeding into some downturn within the industry … right now, we trying to make sure policymakers are responding in the right way. But, ultimately, the solution here is to work in a diplomatic way to make sure oil markets are well-balanced,” he said.

Analysis: Facing virus outbreak, Trump’s tactics fall short (AP) – The escalating coronavirus crisis is presenting President Donald Trump with a challenge for which he appears ill-equipped, his favorite political tactics ineffective and his reelection chances in jeopardy.A rare crisis battering the White House that is not of the president’s own making, the spreading coronavirus has panicked global financial markets and alarmed Americans, many of whom have turned to the Oval Office for guidance and reassurances. But what they have found is a president struggling for a solution, unable to settle Wall Street and proving particularly vulnerable to a threat that is out of his control.In an address to the nation Wednesday night, Trump announced a sweeping travel ban for much of Europe as well as a package of proposals to help steady the teetering economy. But he continued to play down the severity of the situation, painting it as a foreign threat that soon will be banished rather than focusing on managing the growing number of cases at home.“This is the most aggressive and comprehensive effort to confront a foreign virus in modern history,” Trump declared.Addressing the economic costs, he added, “This is not a financial crisis, this is just a temporary moment of time that we will overcome together as a nation and as a world.” But the virus has appeared impervious to the Republican president’s bluster.The virus does not have a Twitter account and, unlike so many previous Trump foes, is resistant to political bullying or Republican Party solidarity. It has preyed on his lack of curiosity and fears of germs while exposing divides and inadequacies within senior levels of his administration. It has taken away Trump’s favorite political tool, his rallies, from which he draws energy and coveted voter information.And eight months from Election Day, it has endangered his best reelection argument – a strong economy – just as Joe Biden, the candidate emerging from the Democratic field, seems poised to take advantage of a political landscape upended by the virus.

House Democrats’ coronavirus bill delayed as GOP pushes to include Trump proposals – House Republicans made clear Thursday that they won’t support the new emergency coronavirus aid bill unveiled by Democrats – at least not in its current form.Lawmakers in both parties are scrambling to take action to combat the deadly coronavirus pandemic.But Republicans have hang-ups with the specifics of the Democrats’ bill, CNBC’s Ylan Mui reported Thursday, because it omits several of the measures President Donald Trump had called on Congress to enact. Politico reported Thursday morning that House Minority Leader Kevin McCarthy R-Calif., opposed the bill.McCarthy was expected to explain his problems with the bill in public remarks at 10 a.m. ET. In a tweet earlier Thursday, he called the plan “unworkable” and complained that House Speaker Nancy Pelosi, D-Calif., had introduced the “completely partisan” bill late at night Wednesday.Pelosi spokesman Drew Hammill responded on Twitter that McCarthy’s claim was “not true.””Minority staffs of committees of jurisdiction were given language yesterday afternoon” and had already requested changes, Hammill said.Pelosi continued negotiations with Treasury Secretary, Steven Mnuchin that had begun earlier in the week.Trump, in an Oval Office address Wednesday night, had asked lawmakers to consider implementing payroll tax relief amid the U.S. response to the virus. That measure, which even some Republicans have been reluctant to endorse, is not included in the Democrats’ bill.Payroll taxes fund entitlement programs such as Social Security and Medicare.The bill also ignores Trump’s call for increased authority for Small Business Administration loans.A spokesman for Pelosi told CNBC that the payroll tax and SBA measures did not come up during the speaker’s call with Mnuchin.Lawmakers are set to return to their districts for the next week, compounding the sense of urgency to push something through the chamber while members are still there to cast votes.

‘I don’t want to use the b-word’: Trump aides race to rescue the economy -The Trump administration is scrambling to prop up industries crumbling under the weight of the novel coronavirus outbreak. Just don’t call it a “bailout” around any White House officials or Republicans on Capitol Hill. President Donald Trump’s top aides are racing to design a wide-ranging government rescue of major sectors of the economy – such as airlines, hospitality and other service industries – amid a collapsing stock market and cascading shutdowns of major sports events, Broadway shows, museums and amusement parks. Behind the scenes, the Treasury Department and top economic officials are exploring ways to help out industries struggling financially from a rapid shutdown. They’re leaning toward some type of tax relief or deferring tax payments to provide an initial cushion – hoping to avoid a full-fledged bailout akin to the 2008 banking rescue that could prove difficult to clear past the Republican base. “I don’t want to use the b-word,” said one senior administration official, who acknowledged the White House is looking at resources necessary – including tax relief or direct injections of funds – to offset the downturn in industries and businesses with thousands of affected employees. “If what the airline industry says is true, then Congress really will have little choice to act or face a significant extinction moment for the airline industry,” the official added. SharePlay Video Trump hinted at such a move in his Oval Office address on Wednesday night, saying he had asked Treasury to defer tax payments for businesses and individuals hurt by the coronavirus, using emergency authority. “This action will provide more than $200 billion of additional liquidity to the economy,” he told Americans.

Trump’s coronavirus task force is reportedly awaiting ‘research’ from Jared Kushner before making an emergency declaration — Just when Jared Kushner’s policy portfolio couldn’t get any thicker, the president’s son-in-law has reportedly found himself at the crux of a critical coronavirus decision. Kushner already helms the White House’s efforts to achieve peace in the Middle East and resolve the opioid crisis in the US while also serving as the liaison to Mexico, China, and the global Muslim community. He is now set to be the final sign-off on the White House coronavirus task force’s recommendation to the president ahead of his address on Wednesday night, according to a report from Politico. President Donald Trump is hesitant to declare a full emergency, according to three people familiar with the decision-making who spoke with Politico, and instead leaning toward a more limited response that would keep in-line with his tendency to downplay the severity of the virus. However, Kushner is the lynchpin to whatever Trump will announce in his address to the nation, Politico reported. “The task force will not give Trump its final verdict” ahead of the address until Kushner “finishes his research and comes to a conclusion himself,” Politico reported. Under the Stafford Act, Trump would be able to give federal agencies more authority and leeway to assist in transportation and shelter for those affected by the virus by tapping into the $34 billion disaster-relief fund under the Federal Emergency Management Agency. On Wednesday evening, Trump announced that the US will ban all travel from Europe except for the United Kingdom, with the exception of Americans who have been appropriately screened, for thirty days beginning on Friday at midnight. Financial markets have also plunged as the virus continues to spread and more and more countries implement restrictions on travel and day-to-day work.

Inside Jared Kushner’s coronavirus research: a wide net on a giant Facebook group – Just before midnight Wednesday, a doctor asked a group of fellow emergency room physicians on Facebook how they would combat the escalating coronavirus outbreak. “I have direct channel to person now in charge at White House,” Kurt Kloss wrote in his post. The next morning, after hundreds of doctors responded, Kloss explained why he sought the suggestions: Jared Kushner, President Donald Trump’s son-in-law and senior adviser, had asked him for recommendations. Kloss, whose daughter is married to Kushner’s brother, sent Kushner 12 recommendations Thursday morning. The Facebook crowd-sourcing exercise showed how Trump‘s team is scrambling for solutions to confront the outbreak after weeks of criticism for the administration’s sluggish response, a shortage of tests and the president’s own rhetoric downplaying the pandemic. It is now expected to consume the final year of Trump’s first term and threaten his campaign for a second term. Trump appointed Vice President Mike Pence to lead a task force to combat the spread of the coronavirus two weeks ago. But in recent days as conditions worsened and criticism mounted, Kushner took a more active role, according to two people familiar with the situation. Kushner has attended several meetings on coronavirus alongside Trump, including one with banking leaders at the White House Wednesday to discuss how they could help their customers hit by the outbreak. He is also talking to people about whether Trump should declare an emergency, bringing in the Federal Emergency Management Agency to coordinate and unleashing billions of dollars for struggling states. Trump has tapped Kushner to lead on several contentious issues, including Middle East peace, immigration and criminal justice reform, all of which involved him engaging in lengthy consultations with impacted people before recommending a decision to Trump. In a Facebook post, Kloss said Kushner is “now directly involved in the response to this,” referring to coronavirus.

Trump Declares National Emergency Over The Coronavirus – President Trump declared a national state of emergency on Friday over the coronavirus outbreak, unleashing billions of dollars in federal funding and ordering all states to set up emergency operations centers to combat the pandemic. “To unleash the full power of the federal government, I’m officially declaring a national emergency,” Trump told reporters in the White House Rose Garden. “Two very big words.” A number of cities and states have already declared states of emergency, allowing them to access federal aid to address the health crisis, but Trump said the national emergency would unleash a further $50 billion nationally. The president also ordered hospitals to activate emergency preparedness plans. “We’ll remove or eliminate every obstacle necessary to deliver our people the care that they need and that they’re entitled to,” he said. “No resource will be spared, nothing whatsoever.” Trump said Google is setting up an online quiz that people can take to determine whether they need to be tested for the coronavirus. Those who need the test will then be directed to a drive-thru testing area; Walmart, Target, CVS, and Walgreens CEOs said they will open their parking lots across the country for testing. Additionally, Trump announced a public-private partnership to increase testing for COVID-19, saying that the FDA had approved a new test within hours after receiving an application to do so. “We therefore expect up to half a million additional tests will be available early next week,” he said. “We’ll be announcing locations probably on Sunday night.” The administration is also directing nursing homes to temporarily restrict visitors and nonessential personnel with a few exceptions such as end-of-life situations, Center for Medicare and Medicaid Services administrator Seema Verma said at the press conference. “We fully appreciate that this measure represents a severe trial for residents of nursing homes and those who love them. But we are doing what we must to protect our vulnerable elderly,” said Verma.

McConnell Cancels Senate Recess, Will Remain In Town To Craft COVID-19 Legislation – Senate Majority Leader Mitch McConnell (R-KY) has slammed legislation introduced by House Democrats to tackle coronavirus as an “ideological wish list” which he vowed to block because it creates a “needless thicket of bureaucracy.” “Instead of focusing on immediate relief to affected individuals, families and businesses, the House Democrats chose to wander into various areas of policy that are barely related, if at all, to the issue before us.” he said. McConnell said that instead he wants a smaller, non-controversial coronavirus response package.House Majority Leader Kevin McCarthy (R-CA) also signaled his opposition to the Democratic proposal. House Democrats are hoping to vote for their economic stimulus bill on Thursday, which would include provisions that mandate paid sick leave for workers, provide over $1 billion in aid to state and local governments $1 billion for food programs and unemployment. Update: McConnell responds : Unfortunately, Speaker Pelosi’s first draft from late last night was off-base. It does not focus immediate relief on affected Americans. It proposes new bureaucracy that would only delay assistance. It wanders into policy areas that are not related to the pressing issues at hand. – Leader McConnell (@senatemajldr) March 12, 2020 (Update 11:11 ET): President Trump says he does not support House Democrats’ coronavirus bill because it includes ‘unrelated goodies.’ He added that he won’t invoke emergency powers under the stafford act over the outbreak at this time. Meanwhile, Trump’s former Homeland Security Secretary Tom Bossert has some thoughts on what should be done right now: In two weeks, we will regret wasting time and energy on travel restrictions and wish we focused more on hospital preparation and large scale community mitigation. (Update 13:45 ET): McConnell has canceled the Senate recess over the coronavirus, saying on Tuesday that they will remain in town to craft COVID-19 legislation.

Coronavirus: Trump backs economic relief deal reached with Democrats – President Donald Trump said Friday he will support an agreement with House Democrats on legislation to provide economic relief to Americans affected by coronavirus.“I fully support H.R. 6201: Families First CoronaVirus Response Act, which will be voted on in the House this evening. This Bill will follow my direction for free CoronaVirus tests, and paid sick leave for our impacted American workers,” Trump tweeted.Trump said he encouraged Republican and Democratic lawmakers to “VOTE YES” on the package.House Speaker Nancy Pelosi announced an agreement earlier Friday, but Trump appeared to cast doubt on that measure during a Rose Garden press conference. And for several hours White House aides declined to offer clear guidance on whether they agreed with Pelosi about the deal.Trump’s remarks and the subsequent silence from the White House left the fate of the legislation unclear. Rank-and-file Republicans in the House were unlikely to go along with an agreement without a clear understanding that the president would sign it. “We don’t think the Democrats are giving enough,” Trump said.The legislation would ensure sick leave for affected workers and include money for testing for Americans, including the uninsured. Trump and lawmakers have been under pressure to ease fears over the spread of the deadly coronavirus, which has halted many parts of public life, forced the closure of schools and pummeled financial markets. But Trump appears to have not won a key provision he had sought: a payroll tax holiday. Trump blamed Democrats for opposing the idea, but it also drew a chilly response from a number of Senate Republicans.

Pelosi, Trump strike deal on coronavirus response package – Speaker Nancy Pelosi (D-Calif.) and President Trump struck a deal Friday evening on a multibillion-dollar stimulus package aimed at assisting millions of Americans directly hurt by the coronavirus outbreak. The deal arrived after days of roller-coaster negotiations that put the outcome in doubt as the nation’s leaders raced to ease public anxiety and stabilize volatile markets. Just hours before the deal was announced, Trump suggested in a Rose Garden address that he wasn’t on board, raising doubts that the two sides could come together. The deadly pandemic has roiled the stock market, upended small businesses and large industries alike, and canceled major sporting and political events around the country. Millions of Americans could lose income – or their jobs entirely – due to mass public closures, work-from-home orders and the economic downturn sure to follow. “We are proud to have reached an agreement with the Administration to resolve outstanding challenges, and now will soon pass the Families First Coronavirus Response Act,” Pelosi wrote in a letter to her Democratic colleagues. The agreement struck Friday aims to ease some of the economic stress by providing financial assistance to those most directly affected by the crisis, including unemployment and paid leave benefits. Perhaps more importantly, the deal aims to calm some of the public trepidation and market turmoil of recent weeks by demonstrating that Washington policymakers can put aside partisan differences and unite quickly behind an emergency response befitting – at least in rhetoric – the severity of the crisis. Pelosi had been engaged in intense negotiations throughout the week with Treasury Secretary Steven Mnuchin, Trump’s point person on the second round of emergency coronavirus relief. On Thursday, the two spoke at least four times by phone as they neared an agreement, aides said. To get there, they had to iron out a small handful of delicate wrinkles that threatened to sink the entire package.

Pelosi, Trump strike deal on coronavirus response package —Speaker Nancy Pelosi (D-Calif.) and President Trump have struck a deal on a multibillion-dollar stimulus package aimed at assisting millions of Americans directly hurt by the coronavirus outbreak.Pelosi announced the deal on Friday evening after days of roller-coaster negotiations that put the outcome in doubt, as the nation’s leaders raced to ease public anxiety and stabilize volatile markets. Trump said on Twitter that he looked forward to signing the legislation.”I have directed the Secretary of the Treasury and the Secretary of Labor to issue regulations that will provide flexibility so that in no way will Small Businesses be hurt. I encourage all Republicans and Democrats to come together and VOTE YES!” Trump wrote in a series of tweets.Just hours before the deal was announced, Trump said in a Rose Garden address that he wasn’t on board, suggesting a bipartisan deal was out of reach even as the number of cases in the U.S. approached 2,000.And even after Pelosi’s announcement, there was widespread confusion across the Capitol about whether Trump had endorsed the package. Several GOP lawmakers said no agreement had been secured, and even House Majority Leader Steny Hoyer (D-Md.) suggested Friday evening that the talks were still in flux.Yet Treasury Secretary Steven Mnuchin, who has been leading the negotiations with Pelosi, seemed to put the confusion to rest just before 8 p.m. when he told Fox Business that there was, in fact, a deal.”We have an agreement that reflects what the president talked about in his speech the other night. He’s very focused on making sure that we can deal with the coronavirus,” he said. The frantic, eleventh-hour talks that brought the sides together highlight the urgency facing leaders from both parties to take aggressive actions to contain the fast-moving virus, for reasons of both public health and national morale.

House passes bill to help prop up economy from coronavirus – The House early Saturday morning passed legislation aimed at mitigating the economic impact of the coronavirus by providing financial assistance to people impacted by the pandemic. The measure, which passed 363-40, includes provisions that would ensure that workers can take paid sick or family leave, bolster unemployment insurance, and guarantee that all Americans can get free diagnostic testing for the coronavirus. Its passage comes after two days of uncertainty while Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin engaged in intense negotiations to accommodate GOP concerns, such as the cost of paid sick leave on businesses and ensuring that no taxpayer funds can be used for abortion. House Democrats initially unveiled their legislation Wednesday night and threatened to move forward with or without the GOP, but with the growing number of coronavirus cases resulting in an increasing number of school, business, entertainment and athletic event shutdowns – as well as historic stock market losses – lawmakers were under pressure to take drastic action that actually stood a chance at becoming law. “We could have passed our bill yesterday,” Pelosi told reporters at a late Friday night press conference in the Capitol. “But we thought it was important to assure the American people that we are willing and able to work together to get a job done for them.” Yet confusion over whether they had struck a deal remained late into Friday evening, with GOP lawmakers throwing cold water on a deal and saying Pelosi jumped the gun on announcing an agreement. Fox Business host Lou Dobbs then teased an interview with Mnuchin, who was meeting with President Trump as the show was airing, before the Treasury secretary announced at the end of the program that they had, in fact, come to a consensus. Trump eventually tweeted that he “fully” supports the bill to assure anxious GOP lawmakers that he would sign it into law. Trump added that he directed the Departments of Treasury and Labor “to issue regulations that will provide flexibility so that in no way will small businesses be hurt.” The two sides spent hours finalizing the legislative text, which ultimately wasn’t publicly posted until just before midnight – less than an hour before the House voted on it. Rep. Justin Amash (I-Mich.) voted “present” after he criticized the short timeframe to review the revised bill, tweeting that he was “reading fast.”

Brazilian president’s press secretary tests positive for coronavirus, days after meeting Trump – Fabio Wajngarten, the press secretary for Brazilian President Jair Bolsonaro, tested positive for coronavirus on Thursday, two sources have told CNN. Bolsonaro’s health is being monitored. It comes just days after Wajngarten met US President Donald Trump in Florida. Trump was in close physical proximity with the Wajngarten Saturday night, two people familiar tell CNN. The Brazilian press secretary attended the dinner Trump hosted at his Mar-a-Lago resort in Florida, took a photo with the US President and later stood feet away from Trump as he spoke during Kimberly Guilfoyle’s birthday, the sources said. White House press secretary Stephanie Grisham issued a statement Thursday saying: “Both the President and Vice President had almost no interactions with the individual who tested positive and do not require being tested at this time.” She added: “The White House Medical Unit and the United States Secret Service has been working closely with various agencies to ensure every precaution is taken to keep the First & Second Families, and all White House staff healthy.” Bolsonaro’s aide also posted an image of himself standing with Trump and US Vice President Mike Pence at Mar-a-Lago over the weekend.

Trump, Pence Won’t Be Tested After Meeting Brazilian Official With Coronavirus – A Brazilian government official who attended a meeting at Donald Trump’s Florida resort on Saturday and posted a photo of himself standing next to the U.S. president and Vice President Mike Pence has tested positive for the 2019 novel coronavirus, Brazil’s presidential office confirmed on Thursday. However, White House Press Secretary Stephanie Grisham said in a statement that Trump and Pence had “almost no interactions” with the senior aide and “do not require being tested at this time.” “Exposures from the case are being assessed, which will dictate next steps,” she added. “To reiterate CDC guidelines, there is currently no indication to test patients without symptoms, and only people with prolonged close exposure to confirmed positive cases should self-quarantine.” Fabio Wajngarten, the press secretary for Brazilian President Jair Bolsonaro, accompanied the far-right leader to Mar-a-Lago on Friday for a visit that included dinner with Trump, National Security Adviser Robert O’Brien and Trump’s daughter and son-in-law, Ivanka Trump and Jared Kushner. On Sunday, the delegation reportedly met with U.S. military Southern Command senior leaders, who then traveled to Capitol Hill and the Pentagon. On Monday, the delegation met with Sen. Rick Scott (R-FL) for a meeting at the Hilton Miami Downtown and, while Scott said he didn’t believe he came into contact with Wajngarten, he was in the same room as the Brazilian aide. “The [Brazilian] Embassy said the person had no symptoms leading up to or the day of the conference,” Scott said in a statement, adding that he would cancel a scheduled press conference on coronavirus testing and instead self-quarantine out of “an abundance of caution.” Bolsonaro has also been tested for the virus and is awaiting the results.

Second Mar-a-Lago guest tests positive for coronavirus – A second person who was with President Trump at his Mar-a-Lago resort in Florida this past weekend has tested positive for COVID-19, the diseased caused by the novel coronavirus. Republican officials said that a guest at a fundraiser at the Florida resort who attended a luncheon with Trump later tested positive for the coronavirus infection. The news came after a Brazilian official who met with Trump also tested positive.“As you may have had contact with this individual, please contact your medical provider if you or any of your loved ones is ill” or shows other symptoms, donors were told, according to a copy of a message obtained by The Washington Post.Trump has sought to downplay the interaction with the press aide to Brazilian President Jair Bolsonaro, even after photographs emerged of the two in close proximity to each other and shaking hands.“That night, I was taking hundreds of pictures,” Trump said during an earlier exchange with a reporter about the matter.However, Trump reversed course during remarks at the White House Friday, saying he would be tested.“Most likely, yes,” Trump told a reporter during an exchange about his recent contact with the Brazilian official. “Not for that reason, but because I think I will do it anyway. “Fairly soon, we’re working out a schedule,” he added.

Trump takes coronavirus test, extends travel ban to Britain, Ireland – (Reuters) – President Donald Trump said on Saturday he had taken a coronavirus test but that his temperature was “totally normal,” as he extended a travel ban to Britain and Ireland to try to slow the spread of a pandemic that has shut down much of the daily routine of American life. After White House officials took the unprecedented step of checking the temperatures of journalists entering the briefing room, Trump told reporters he took a test for the virus on Friday night and that he expects the results in “a day or two days.” He met with a Brazilian delegation last week, at least one member of which has since tested positive. Trump said Americans should reconsider non-essential travel, and that his administration was also considering domestic travel restrictions. Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said the country has recorded 2,226 case of the new coronavirus but has not yet reached the peak of the outbreak. “This will get worse before it gets better,” Surgeon General Jerome Adams said at the briefing. But, he added, “99% of people will recover and people need to know that.” Critics have accused Trump of focusing too much on markets, which on Friday saw the three major Wall Street indexes gain more than 9% after having had their worst day since 1987 on Thursday.

Trump aides pound on China. Health experts say: Please stop. -They call it the “Wuhan virus.” As a lethal pandemic races across the world, overwhelming health systems and upending entire societies, President Donald Trump’s top aides and allies see an opening to weaken a vulnerable adversary. Advertisement The Trump team’s escalating drumbeat against China is worrying some public health experts, who say the attempts to blame Beijing for the coronavirus outbreak could harm efforts to combat the spreading contagion, while winning praise from others. And it’s come amid conspiracy theories and counteraccusations from Chinese officials, some of whom are alleging the virus’s true origins lie outside China, in what U.S. officials say is a malicious effort to shift blame. National Security Adviser Robert O’Brien has accused China of covering up the health crisis. Secretary of State Mike Pompeo has repeatedly labeled the illness the “Wuhan coronavirus” – a reference to the Chinese city that is the epicenter of the disease. Hawkish pro-Trump lawmakers in Congress, meanwhile, have raised alarms about China’s outsized role in global supply chains for key medicines. And that’s on top of other anti-Beijing moves that have nothing to do with the virus at all. The Chinese are fighting back with their own harsh rhetoric, all while signaling that their herculean effort to eradicate the virus means the world should look to them – and not the United States – as a leader and role model. The Trump administration’s hardline reaction to Beijing’s handling of the coronavirus is in many ways par for the course: Its foreign policy relies more on sticks than carrots, and it has flatly declared the ruling Chinese Communist Party a long-term global threat.

‘US Army Behind Covid-19 In Wuhan’- China’s Foreign Ministry Levels Bombastic Charge – A truly bombshell and unprecedented accusation, underscoring that if Sino-US relations amid the broader crisis weren’t already bad enough, they’re about to crash much, much lower: China’s Foreign Ministry spokesman tweets “it might be the US Army who brought the epidemic to Wuhan” – the widely acknowledged epicenter and origin point of the Covid-19 pandemic.Such shock allegations have recently been swirling in foreign media, especially in Chinese, Iranian and Russian press; however, this is the first time such a high Beijing has leveled the charge – this after President Trump controversially referred to it as a “foreign virus”. Foreign Ministry spokesman Zhao Lijian made the remarks on his official Twitter account Thursday, citing prior televised testimony by CDC Director Robert Redfield to the House Oversight Committee:2/2 CDC was caught on the spot. When did patient zero begin in US? How many people are infected? What are the names of the hospitals? It might be US army who brought the epidemic to Wuhan. Be transparent! Make public your data! US owe us an explanation! pic.twitter.com/vYNZRFPWo3 – Lijian Zhao 赵立坚 (@zlj517) March 12, 2020. After four months the globe wrangled over “patient zero” and origin points in China, including scrutiny focused on the Chinese state-owned virology lab in Wuhan, which itself happened to be in the ground zero hot zone, it appears Beijing is now aggressively deflecting “blame” for the spread.”Make public your data! US owe us an explanation!” [sic] Lijian demanded.He said: When did patient zero begin in US? How many people are infected? What are the names of the hospitals? It might be US army who brought the epidemic to Wuhan. Be transparent!So it appears the official Chinese party line is now that the virus originated in the United States!

Twitter Won’t Remove Chinese Official’s Conspiracy Theory Suggesting US Army Secretly Infected Wuhan With COVID-19 — While Zero Hedge remains banned from Twitter for suggesting that a Chinese level-4 biolab experimenting with bat coronavirus (which is 96% genetically identical to COVID-19) – located roughly 900 feet from the Wuhan wet-market widely considered as ‘ground zero’ for the new disease – may have had something to do with the global outbreak the novel coronavirus, Twitter has refused to delete a conspiracy theory from a Chinese official accusing the US Army of introducing it into Wuhan. Chinese Foreign Ministry Spokesman Lijian Zhao claimed in a tweet this week that “It might be US army who brought the epidemic to Wuhan,” citing prior televised testimony by CDC Director Robert Redfield in which he said that early COVID-19 cases were mistaken for regular influenza. 1/2 CDC Director Robert Redfield admitted some Americans who seemingly died from influenza were tested positive for novel #coronavirus in the posthumous diagnosis, during the House Oversight Committee Wednesday. #COVID19 pic.twitter.com/vYNZRFPWo3 2/2 CDC was caught on the spot. When did patient zero begin in US? How many people are infected? What are the names of the hospitals? It might be US army who brought the epidemic to Wuhan. Be transparent! Make public your data! US owe us an explanation! pic.twitter.com/vYNZRFPWo3 – Lijian Zhao 赵立坚 (@zlj517) March 12, 2020 According to Quartz, “The conspiracy posits that 300 athletes from the US military who in October attended the 7th Military World Games in Wuhan, where the epidemic first broke out, were infected with the virus, thereby spreading it in China.” And according to the Daily Caller, “A tweet from Chinese politician Lijian Zhao suggesting the United States is trying to keep secret a plan to inject the virus into China does not violate Twitter rules, a company spokesman said. The spokesman reiterated the company’s existing rules but did not provide a reason for speaking anonymously.” Heaven forbid Twitter choose a CCP conspiracy theory over Occam’s razor.

Federal judge cites coronavirus in decision blocking Trump admin cut to food stamps – A Trump administration rule that would have tightened work requirements for food stamps was blocked by a federal judge on Friday, who cited the rapidly spreading coronavirus in her decision. D.C. District Court Chief Judge Beryl A. Howell granted a preliminary injunction blocking the new rule, which government estimates predicted would kick as many as 700,000 Americans off of food stamps. “Especially now, as a global pandemic poses widespread health risks, guaranteeing that government officials at both the federal and state levels have flexibility to address the nutritional needs of residents and ensure their well-being through programs like SNAP, is essential,” Howell wrote in her ruling, according to HuffPost, which first reported the injunction. A coalition of 14 states and two major cities, as well as the Legal Aid Society of the District of Columbia, had sued the Trump administration over its rule to restrict the ability of states to provide food stamps to jobless residents. Under the new rule “able-bodied” Americans who are not caring for a child younger than 6 years old would be eligible for food stamps only if they’re employed or enrolled in a vocational training program. “The waivers that the Rule curtails are critical to ensuring access to food for low-income people who live in areas with limited employment opportunities,” read the complaint filed by the 14 states and New York City and Washington, D.C. “If implemented, the Rule will have a drastic impact on Plaintiffs and their residents by depriving between 688,000 and 850,000 vulnerable Americans of much-needed nutritional assistance.”

HHS official overseeing immigrant shelters changes roles to assist with coronavirus response – The Health and Human Services (HHS) official who was in charge of overseeing the department’s shelters for immigrants has changed roles, the agency announced Friday. An official for HHS said that Jonathan Hayes, who had served as director of the Office of Refugee Resettlement (ORR), will now work on HHS’s response to the coronavirus outbreak. “At the beginning of March, as part of the Department’s work to combat COVID-19, Secretary Azar directed his Assistant Secretary for Preparedness and Response, Dr. Robert Kadlec, to lead HHS’s interdepartmental incident response structure, in line with the Department’s emergency support function responsibilities,” the official said. “To assist in this endeavor, Jonathan Hayes has been named Senior Advisor in the Office of Assistant Secretary for Preparedness and Response.” “Hayes has served as the Director of the Office of Refugee Resettlement (ORR) within the Administration for Children and Families (ACF) and brings a tremendous amount of experience managing complex logistical challenges as Director of ORR, under often difficult and dynamic circumstances,” the official added. Hayes’s role overseeing ORR thrust him into the spotlight amid the Trump administration’s hardline immigration policies, including the now-scrapped “zero tolerance” policy that led to a spike in family separations at the border. Hayes has had the top ORR job since February 2019 when the department was experiencing a flood of referrals of unaccompanied children who were apprehended by Border Patrol agents after crossing the border. ORR clashed with Immigration and Customs Enforcement (ICE) under Hayes’s tenure. Senior officials reportedly pushed to have ICE agents inside ORR facilities last year, but the administration ultimately chose to allow ICE only to collect fingerprints from people who sought to pick up immigrant children at government shelters.

Flock of Black Swans Tanks Stocks, Oil, Treasury Yields; Fed Sticks Its Finger in the Dike – Pam Martens – There are now so many Black Swans circling in the sky against darkening clouds that it’s starting to feel like news on steroids. Here’s what we woke up to this morning: Futures on the Dow Jones Industrial Average contract had fallen 5 percent overnight so they are now locked, limit-down in the futures market in Chicago. We can get a pretty good idea, however, of just how far the stock market will fall when it opens at 9:30 a.m. in New York from the SPDR Dow ETF, which at 9:03 a.m. suggested an opening loss of about 1,681 points or 6.5 percent from its close on Friday. Those projected losses, of course, could be stemmed before the market opens by news of liquidity injections. The stock market, of course, has been spooked by growing cases of the coronavirus and escalating outbreaks from community spread in the U.S. That anxiety was heightened over the weekend with news that Italy had quarantined 16 million residents in Northern Italy. The area included the business capital of Milan. As of Monday morning, the number of confirmed cases worldwide jumped to 110,000 with deaths just under 4,000. As if the coronavirus wasn’t enough for nervous traders and investors to deal with this morning, crude oil has also staged a crash, trading down over 20 percent from its close on Friday. The crash in the price of oil comes as Saudi Arabia is threatening to open its spigots to grab market share following a breakdown in talks for production cuts in Vienna last week. OPEC had recommended additional cuts of 1.5 million barrels a day but Russia balked. Because Saudi Arabia is a low-cost producer, it could level serious damage on oil producers in the U.S. The junk bond market, which has significant exposure to energy companies, is likely to react negatively to the oil news. That will in turn put pressure on the biggest Wall Street banks, which have loan exposure to that sector. Adding to the surreal aspect of this morning’s news, the yield on the 10-year U.S. Treasury note crashed through 0.50 percent and traded as low as 0.3802 percent. Even during the Great Depression, the 10-year Treasury note traded in a range of 2 to 3 percent. The unprecedented decline in yields is a result of a safe haven flight to the Treasury instrument as chaos erupts in markets around the world. Stock markets in Europe were also in panic mode. The U.K.’s FTSE, Germany’s DAX, and France’s CAC 40 had all fallen by about 8 percent by early afternoon in Europe.

There Was a Bloodbath in Wall Street Banks and Insurers Yesterday – Pam Martens – President Donald Trump is bringing a pea shooter to a gunfight. If you look carefully at the charts on this page from yesterday’s trading bloodbath, it’s clear that there is a deep financial crisis playing out. The idea that this can be remedied with a payroll tax cut is the stuff of tooth fairies. And this crisis didn’t begin with the coronavirus. Headlines about the virus did not start appearing in the U.S. until January of this year. But the Federal Reserve began making hundreds of billions of dollars each week in cheap loans to Wall Street’s banks on September 17, 2019 – the first time it had done this since the 2008 financial crisis. You can earmark September 17, 2019 as the actual date that this Financial Crisis II got underway. All of the toothless financial reforms of the Dodd-Frank legislation of 2010, together with the rollback of reforms since then, are now coming home to roost – as it was inevitable that they would. To give you a snapshot idea of just how grave the situation was yesterday, JPMorgan Chase, the largest federally-insured bank in the U.S. which also holds tens of trillions of dollars of derivatives, fell by a larger percentage yesterday than on September 15, 2008 – the day that Lehman Brothers filed bankruptcy at the height of the 2008 financial crisis. JPMorgan Chase fell 13.55 percent yesterday versus just 10.13 percent on September 15, 2008. Citigroup led the declines among the mega Wall Street banks yesterday with a stunning loss of 16.17 percent. This is the same bank that received the largest government bailout in global banking history in 2008. Why it was even resuscitated by the government in 2008 remains a nagging question and there would be political upheaval if a repeat performance was suggested. Bank of America, parent of the sprawling retail brokerage firm, Merrill Lynch, declined by 14.70 percent while Deutsche Bank, which has a heavy derivatives footprint on Wall Street, shed 12.78 percent – erasing equity capital it desperately needs right now to stay afloat. Goldman Sachs and Morgan Stanley, which have the ability to trade in their own Dark Pools to protect their share price, closed down 10.39 percent and 10.37 percent, respectively.Among the insurers with derivative exposure to Wall Street, Lincoln National (LNC) led the declines losing 16.82 percent. It is now down by 47 percent in less than a month. MetLife (MET), which sued the government to get removed from the SIFI list (Systemically Important Financial Institution), certainly appeared to be a SIFI yesterday: it lost 16.64 percent and traded as part of the mega bank/insurer derivatives herd. Prudential Financial (PRU), Ameriprise Financial (AMP), and AIG also experienced deep double-digit losses. Not to put too fine a point on it, but AIG received a $185 billion bailout by the government in the 2008 financial crash. It’s not likely there is going to be the political will for a replay of that either – especially given President Trump’s large libertarian voter base that doesn’t believe in government handouts.

Insider Buying Surges To Nearly Decade Long High Amid Coronavirus Sell-Off – Those asking who is “buying while there’s blood in the streets” over the last couple months may very well have their answer: corporate insiders. While we are still waiting for the first big activist to take a swing – or the first signs of large M&A that can sometimes come with selloffs, there’s one group of people that aren’t waiting to pull the trigger. Executives are hitting the clearance rack and buying shares of their own companies at what Bloomberg calls a “breakneck” pace during the first couple of weeks of March. The total purchased has exceeded the last two months combined and insider buys are outpacing sales by the most since 2011. Megan Horneman, director of portfolio strategy at Verdence Capital Advisors commented: “When insiders are buying, they think their companies are well undervalued. It can be a good sign that we’re trying to find a bottom around here — not necessarily that it is the bottom but at least that we’re trying to find the bottom here.” The S&P 500 is now trading at a 14% discount to its 5 year average, which could perhaps be why almost 1,400 executives have bought shares of their own companies. The list includes the CEO of Newell Brands and Kinder Morgan. Buyers outnumbered sellers by nearly a 3:2 ratio. The last two times insiders bought similarly were in July 2011, preceding a 10% rally in the next two quarters, and in December 2018, preceding a 40% bounce off lows as the market rallied throughout 2019.

Life Insurance Providers at Major Risk Over Coronavirus and Plummeting Bond Yields -Major U.S. life insurance providers have struggled as COVID-19 continues to spread throughout the country. However, while it’s likely that many of these companies will face policy losses as the number of COVID-19-related deaths grow, they also face a threat from collapsing bond rates, which had hit historic lows earlier this week. Should bond rates continue to stay low, major life insurers could have to charge more and reprice their products in an effort to stay financially afloat. When coupled with the possibility of further COVID-19-related deaths and the payouts that this would require from healthcare insurance providers, the sector appears to be in a riskier position than ever. Insurance companies usually have a substantial exposure to interest-sensitive assets (including bonds) while also providing interest-sensitive products to their clients. Sudden drops in interest rates, as was seen on Monday, where the 10-year Treasury yield hit a new all-time low of 0.318%, can dramatically affect the balance sheets of these businesses. A struggling market The life insurance sector has seen significant declines over the past month. In comparison to the S&P 500, which fell by around 19% over the past four weeks, the S&P 500 Life & Health Insurance index declined by around 37%. Major life insurers, such as Prudential Financial (NYSE:PRU) and Metlife (NYSE:MET), both fell significantly on Wednesday, declining 7.8% and 4.9%, respectively. Both stocks have lost almost 40% of their market value over the past couple of weeks.

More coronavirus challenges for banks; RBS delays -The CEOs of the largest U.S. banks “struck a calming tone Wednesday in a White House meeting with President Trump that was light on policy talk and largely meant to reassure markets,” the paper says. Bank of America CEO Brian Moynihan said banks are in a “great position” on capital and liquidity. “The meeting was called against the worrisome backdrop” of a 20% drop in stock prices, where “bank stocks have been especially hard hit.” Trump called the attendees, who included the heads of Citigroup, Goldman Sachs and others, “probably the best bankers in the world.”“There are signs that [some] executives see more trouble on the horizon,” American Banker reports.Despite the happy talk with the president, bank “earnings likely will suffer” from the crisis, the Journal notes. “Add together some of the biggest challenges U.S. banks weathered in the dozen years since the financial crisis, and you get an idea of how bad the coronavirus epidemic could be for them. Many of their businesses mirror economic activity, so falling growth and rising unemployment can dent their profits. Sharp drops in asset prices can sap their investment-banking and trading revenues as deal activity and investors pause.”And, as investors move away from risky assets, it “saddles lenders with securities they are struggling to sell at desired prices.” The coronavirus outbreak has prompted questions among consumers whether they should keep extra cash on hand. “When it comes to cash, though, the virus fears cut both ways: There are those who also worry that the cash itself could be a source for transmission. Experts say such fears are understandable – but overblown.” The recent drop in the average rate on a 30-year mortgage to a record low of 3.29% last week “could give the flagging economy a much-needed boost amid coronavirus fears. Yet housing is juicing the economy less than it used to, some economists say. Housing never fully recovered from the 2008 financial crisis, and low rates won’t cure its ills. Higher land costs, restrictive zoning, scarce labor and tighter lending standards still limit construction.”

The drop in oil was perhaps the ‘final straw’ for US credit markets, strategist says – Falling oil prices may be the “primary reason” for volatility in U.S. credit markets, including historic lows on Treasury yields this week, according to a fixed income strategist. The credit market is sensitive to moves in oil because a “very large portion” of high-yield bonds in America are issued by companies involved in energy production, distribution and exploration, Thomas Tzitzouris of Strategas Research Partners said. “There’s just a lot of leverage there,” he told CNBC’s “Capital Connection” on Tuesday. Charles-Henry Monchau, chief investment officer of Dubai-based Al Mal Capital, agreed that these firms are vulnerable to oil price shocks. “They’re on the brink, for some of them, of bankruptcies, and obviously this could have a ripple effect on the whole credit market,” he said. Oil plummeted more than 20% on Monday after OPEC and its allies failed to agree on production cuts last week. Saudi Arabia, which initially suggested a large cut, said it would offer discounts on oil and plans to increase production after Russia refused to lower output at the OPEC+ meeting. While crude futures were up on Tuesday, they are still too low for U.S. producers, said Tzitzouris, a director at Strategas. Brent was trading at $37.50 a barrel in Asia’s afternoon, up 9.23%. U.S. crude traded around $34.22, up 9.89%. “Roughly speaking, you can make the argument that below $40 oil, most of these names, especially in the high-yield space, really can’t survive,” he said. “That drop in oil was perhaps the final straw for the U.S. credit markets.”

Virus could deal blow to leveraged loans. What’s that mean for banks? – A rollercoaster stock market. A quickly planned White House meeting with bank CEOs. Uncertainty about the next shoe to drop.With the coronavirus outbreak spurring increasing worries about the economic fallout, there are shades of 2008 in 2020.Which segment of the financial sector could be hardest hit, if any, is still a matter of debate. But some industry watchers say a worsening crisis could unmask the historically high levels of risky corporate debt, including leveraged loans, with a spillover effect for banks.“We may be in an economic moment just as serious as 2008, but it’s an economic moment that looks very different than 2008 in a lot of ways,” said Marcus Stanley, the policy director for Americans for Financial Reform. As businesses have loaded up on debt in the low-interest-rate years following the 2008 financial crisis, the global leveraged loan market is estimated to be anywhere from $1 trillion to $3 trillion. Up to now, regulators have been more worried about nonbanks’ steadily increasing share of that market, with the regulated financial system thought to be protected. Many in the industry have argued that the banks would be insulated from a direct hit to leveraged loans, since most of the risk is concentrated in the nonbank sector. But there is also data that has shown that leveraged loans on banks’ books have been growing steadily in recent years. And even if banks aren’t making these loans directly, they have invested in collateralized loan obligations – which are made up of leveraged loans – and are also exposed through prime brokerage and credit derivatives, said Erik Gerding, a professor at University of Colorado Law School. In that scenario, banks would be among multiple sectors caught in the tailwinds. “I think the real concern is if this hits a broad enough set of industries, that the diversification that happens in the leveraged loans, and particularly in the CLO market, begins to affect a lot of different lenders and investors,” he said.

Regulators pledge assistance to banks affected by coronavirus – Five federal financial agencies and a trade group for state banking regulators have committed to provide “appropriate regulatory assistance” to banks whose customers may be harmed by the coronavirus outbreak, as U.S. markets tumbled in response to the threat the virus poses to the economy. The Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Consumer Financial Protection Bureau, the National Credit Union Administration and the Conference of State Bank Supervisors in a joint statement urged financial institutions to meet the needs of customers.“Regulators note that financial institutions should work constructively with borrowers and other customers in affected communities,” the agencies said in a news release Monday. “Prudent efforts that are consistent with safe and sound lending practices should not be subject to examiner criticism. The regulators also pledged to expedite requests to provide more convenient services to communities hit by the virus and to work with affected banks in scheduling exams to ensure minimal disruption to bank operations. Senate Democrats earlier Monday had said more regulatory guidance for financial institutions was needed on how to help consumer and commercial borrowers whose income streams were disrupted by the outbreak.The Federal Financial Institutions Examination Council released a 10-page interagency statement Friday recommending steps banks should take to proactively prevent disruption of operations, minimize contact between staff and customers and plan for how affected employees reenter the workplace, among other things. “Pandemic planning presents unique challenges to financial institution management,” the FFIEC said in the interagency statement. “Unlike natural disasters, technical disasters, malicious acts, or terrorist events, the impact of a pandemic is much more difficult to determine because of the anticipated difference in scale and duration.” In that guidance, regulators advised banks to develop a program to reduce the likelihood that an institution’s operations will be significantly affected by a pandemic, as well as a strategy for recovering from a pandemic.

Another Dangerous Virus Hits the U.S. – Wall Street Bank Contagion – By Pam Martens – There has been a lot of delusional talk about the strong capital levels of the mega banks on Wall Street, not only from the Federal Reserve, but also from Wall Street analysts spreading fantasies about the banks on cable news programs. We took an afternoon off last Friday to hear what was being said about the banks on CNBC. We were stunned to hear Mike Mayo, a long-tenured bank analyst on Wall Street, who currently works for Wells Fargo Securities, deliver a huckster-like assessment of the mega Wall Street banks. Mayo said this: “The banking industry has the strongest balance sheet in a generation. Now think about this: the banks have added $1 trillion of additional capital – that’s $1 trillion with a T; $2 trillion of additional cash; $3 trillion of additional deposits. You have a Federal Reserve stress test every year. Every year, the Federal Reserve, the overseer of the banking industry, they assume Armageddon will happen.” Mayo forgets to mention this: the big banks have been bleeding common equity capital since this selloff began. Since the first trading day of this year, January 2, JPMorgan Chase has lost $138.27 billion of its common equity capital, a decline of 32 percent. The carnage at Citigroup has been even worse with its common equity capital tanking by 37.5 percent, more than a third. See the chart above for the contagion effect among the other mega banks on Wall Street. As for the Fed’s stress tests, which are simply another illusion, see our report: Three Federal Studies Show Fed’s Stress Tests of Big Banks Are Just a Placebo. Then there is Mayo’s pitch that the banks have $2 trillion of additional cash. If they were actually rolling in liquidity, they wouldn’t be needing those hundreds of billions of dollars in revolving repo loans from the Fed each week, which began for the first time since the financial crisis on September 17 of last year and just got massively bigger today. (See our in-depth, ongoing series on the Fed’s repo loans to Wall Street here.) As for adding $3 trillion in additional deposits, that has been eclipsed by the retention of dangerous derivatives at these banks. As of September 30, 2019, according to the regulator of national banks, the Office of the Comptroller of the Currency, those same five bank holding companies held $230 trillion in notional (face amount) of derivatives, which represents 85 percent of all derivatives held by the more than 5,000 banks and savings associations in the United States. This is the very definition of concentrated, uncontrollable risk.

Coronavirus scams to watch out for – Fraudsters of all stripes are taking advantage of the coronavirus scare, and some of their scams are a direct threat to banks and their customers. Granted, New York hardware stores charging $79.99 for a bottle of hand sanitizer get the spotlight. But there are also hackers in the shadows sending emails and creating websites designed to trick people into clicking on malicious links disguised as helpful resources. Consumers can end up with malware on their computers that steal online banking credentials or credit card numbers. “Cybercriminals will often take advantage of trending topics in the news, such as the coronavirus, to try and prey on consumers using fear and urgency tactics,” said Gary McAlum, senior vice president and chief security officer for USAA. In the case of the COVID-19 pandemic, such activity is especially insidious in that it mimics communications from expert sources such as the World Health Organization, the Centers for Disease Control and Prevention and Johns Hopkins University. “I think false information is becoming more of a problem, especially in times of crisis, because … everyone’s looking for the best information, and they have no way of judging if it’s real or not,” said Avivah Litan, vice president at Gartner. And even for consumers who consider themselves savvy enough to spot fakes, “they’re not clearheaded, and they’re usually very anxious to get the information, so they’re not going to analyze the URL or details of a map, images or instructions.” Litan’s point about analyzing URLs carefully before clicking on them applies to a fake-map scam. Johns Hopkins’ popular COVID-19 dashboard has been a go-to source for people who want to stay up to date on the virus. This fake coronavirus-related map contains a type of spyware that steals usernames, passwords, credit card numbers and other data stored in browsers. But researchers at Malwarebytes discovered a malicious program, Corona-Virus-Map.com, that claims to provide an up-to-date coronavirus map just like the one at Johns Hopkins. It produces a map that looks exactly like the university’s graphic. But the software has embedded malware called corona.exe that’s a variant of AzorUlt, a type of spyware that steals usernames, passwords, credit card numbers and other data stored in the user’s browser. According to PCRisk.com, the Corona-Virus-Map.com Trojan is distributed through infected email attachments, malicious online ads, social engineering and software vulnerabilities.

Senator urges banks to stop stock buybacks during coronavirus outbreak – The top Democrat on the Senate Banking Committee is calling on banks to suspend stock buybacks in light of the coronavirus outbreak and its impact on the economy.As U.S. stocks continue to plummet as a result of the coronavirus, Sen. Sherrod Brown of Ohio said on the Senate floor Thursday that banks should suspend stock buybacks and invest in their communities. “We have to act now, to make sure we can focus all our efforts on preventing this virus from spreading, and don’t have one crisis stacked on top of another,” Brown said. “One way we can do that is to suspend bank stock buybacks. Banks need to be investing in their communities right now, not investing in their CEOs’ stock portfolios.”Brown’s remarks came during another brutal trading day, as both the Dow Jones industrial average and S&P 500 were down more than 7% as the market opened.In his Senate floor remarks, Brown referenced an ongoing $30 billion buyback at JPMorgan Chase and a $23 billion buyback at Wells Fargo.“That money would be better spent investing in small businesses and medical research and relief for people who need help,” Brown said. “The reason big banks are supposed to have that money is so they can keep lending and keep communities afloat when we have crises like this one.”It’s not the first call from a member of Congress for banks to halt stock buybacks this week.At a House Financial Services Committee hearing Tuesday, Rep. Brad Sherman, D-Calif., asked Wells Fargo CEO Charlie Scharf if the bank would commit to halting stock buybacks and dividends until he is better able to assess the impact of the coronavirus.But Scharf would not commit to suspending stock buybacks and said, “We’re going to run t he bank the way we think is proven with our regulators.”

Securities and Exchange Commission asks D.C. employees to work from home after coronavirus scare – WaPo – The Securities and Exchange Commission on Monday asked employees at its D.C. headquarters to stay away from the office because of a potential coronavirus case, becoming the first major federal employer to turn to telework to avoid the spreading virus.The announcement from the agency, which is charged with monitoring the financial markets, came after a day of turmoil on Wall Street, with the Dow Jones industrial average falling more than 2,000 points. The agency‘s notice, which was emailed shortly after 8 p.m., required employees working on the ninth floor of its office to stay home and encouraged all others to do the same.“Out of an abundance of caution, effective immediately the SEC is requiring all Headquarters personnel (employees and contractors) who work on the 9th floor to telework,” the email to employees read. In an emailed statement, the agency confirmed the announcement. “Even with increased telework, the SEC remains able and committed to fully executing its mission on behalf of investors, including monitoring market function and working closely with other regulators and market participants,” the statement said. The agency has more than 4,000 employees across the country.

CME To Close Chicago Trading Floor On Friday The 13th – Slowly but surely, the paralysis that has gripped virtually every corner of the global economy is spreading toward the beating heart of the world’s capital markets, and according to a notice posted late on Wednesday by the Chicago Mercantile Exchange, starting Friday the 13th the world’s biggest derivatives marketplace will become a ghost town – well, more so even than usual, since the CME already replaced most humans with algos and computers – as it closes its Chicago trading floor indefinitely “as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals.” The CME notice is below: CME Group today announced it will close its Chicago trading floor as of the close of business Friday, March 13, 2020, as a precaution to reduce large gatherings that can contribute to the spread of coronavirus in line with the advice of medical professionals. All products will continue to trade on CME Globex as they do today.No coronavirus cases have been reported on the trading floor or in the Chicago Board of Trade building. The reopening of the trading floor will be evaluated as more medical guidance on the coronavirus becomes available. The company’s headquarters at 20 S. Wacker Drive will remain open. The trading floor community will receive an additional q&a tomorrow related to the execution of certain floor products, procedures and protocols and other floor-related practices. Expect all other cash, future and derivatives exchanges to follow in the CME’s footsteps, as the world’s professional traders no longer welcome in their place of business, scramble for office space in their parents’ basement.

JPMorgan tells New York employees to work from home due to virus – – JPMorgan Chase is planning to implement a staggered work-from-home plan for its New York-area employees after the governor asked businesses to help the state slow the spread of the coronavirus. The bank will split the workers, with one group working from home while the other is in the office, according to people with knowledge of the matter. After a week, the groups will rotate. The plan applies to most corporate employees based in Manhattan, Brooklyn and Jersey City, New Jersey, but not to branch workers or traders, one of the people said. The firm sent its Seattle-area employees home last week. New York Gov. Andrew Cuomo said Wednesday in an interview on CNN that he would ask businesses to voluntarily consider staggering shifts for employees and letting them telecommute to help stem the spread of the highly contagious virus. New York cases jumped to 212 Wednesday after not having a single case less than two weeks ago, according to data from Johns Hopkins University. JPMorgan has about 37,000 employees in the New York metro area, which includes New Jersey, around half of whom are branch employees. Workers in the first group will telecommute through March 20 and return to the office March 23, according to the person.

CFPB chief takes heat from Senate Dems for regulators’ response to virus Consumer Financial Protection Bureau Director Kathy Kraninger came under fire Tuesday from Senate Democrats who questioned what steps the bureau – and other regulators – had taken to help consumers who sustain wage or job losses because of coronavirus outbreak. Sen. Sherrod Brown, D-Ohio, led the charge by asking Kraninger why the Financial Stability Oversight Council – which is supposed to identify emerging threats to the financial system – has not met since November though it is required to meet quarterly. “Considering what’s happening with the financial markets and the public health crisis around the country, would you demand that [Treasury] Secretary Munchin call a meeting immediately to explain publicly what this administration’s plan is to make sure regular Americans don’t end up paying the price?” Brown said. “The purpose of FSOC is to understand and put plans together so things aren’t happening with such chaos as they are now.” Kraninger, who is one of the 10 voting members on the 15-member council, said it plans to meet in late March, but she would not commit to speeding up the council’s plans. She also initially refused to say that the coronavirus had created an economic emergency, but then relented under repeated questioning. “It clearly is a public health emergency that has significant economic impact. It’s something that the administration is looking at day to day,” Kraninger said. “The bureau has a pandemic plan, and we’ve reminded institutions we regulate that they should have pandemic plans. Again, there is an ongoing business-continuity concern and a mission concern in terms of how this is affecting consumers and making sure that we are getting the best possible information out.” Kraninger said the CFPB is working to ensure the safety of its employees. The bureau is trying to adopt a telework policy but has about 50 employees who have not signed on, she said. The CFPB also is taking precautions by asking the public to live-stream its events rather than attend them.

Port Of Los Angeles Taking Substantial Hit , Expects Volume To Plunge 15% From Coronavirus — As the coronavirus grinds the world’s economy to a halt, and supply-chains break, many of the key components of US commerce – like port traffic – are starting to feel the virus’ ugly effects. For instance, year over year volume at the Port of Los Angeles – the busiest seaport not only in the US but in the entire Western hemisphere – is expected to plunge 15% in the first quarter as a result of the outbreak. Executive Director Gene Seroka told American Shipper: “Forty vessel sailings have been canceled from Asia, mainly China, to the Port of Los Angeles from Feb. 11 through April 1. Those 40 vessel cancellations would represent nearly 25% of our normal traffic at the Port of Los Angeles.”He continued: “There are a number of revenue streams that are floating here: the goods themselves, the ocean freight, the business on the docks, truck and warehouse communities. This will be substantial and I’ve given guidance to the marketplace that for the first quarter of 2020, the Port of Los Angeles volume will be down 15% year-on-year.”He also said that nonperishable exports are piling up across the country: “We’re going to start to see a whipsaw effect in the industry. Pretty quickly those empties and exports will need to be evacuated to get ready for factory production when we curb – or hopefully eradicate – this virus and workers can get back on the job.” He continued: “This is a human health concern number one, and we need all hands on deck to get our people well and back to productive lives. But at the same time, we’re going to have to find equilibrium in the industry to play catch-up and then even out before we reach our traditional peak season this summer.”

Factbox: Airlines suspend flights due to coronavirus outbreak – (Reuters) – Airlines across the globe have suspended flights or modified services in response to the coronavirus outbreak. Below are details:

• – American Airlines (AAL.O) extended the suspension of China and Hong Kong flights through April 24
• – Air France (AIRF.PA) canceled flights to mainland China to the end of March.
• – Air India suspended flights to Shanghai, Hong Kong until June 30
• – Air Seoul suspended China flights until further notice.
• – Air Tanzania, which planned to begin a charter service to China in February, postponed its maiden flights.
• – Air Mauritius suspended all flights to China and Hong Kong
• – Austrian Airlines extended its cancellations to March and April. (bit.ly/32SSwVG)
• – British Airways (ICAG.L) extended suspensions until April 17.
• – Delta Airlines (DAL.N) flights suspended to April 30
• – Egyptair resumed some flights to and from China.
• – El Al Israel Airlines (ELAL.TA) extends suspension of flights to Hong Kong and Beijing until May 2.
• – Iberia Airlines (ICAG.L) extended the suspension of flights from Madrid to Shanghai, its only route, until the end of April.
• – Finnair (FIA1S.HE) canceled all flights to mainland China flights and some Hong Kong flights until the end of April.
• – JejuAir Co Ltd (089590.KS) suspended all China routes starting March 1.
• – Kenya Airways (KQNA.NR) suspended flights until further notice.
• – KLM said it would extend its ban on flights to Chengdu, Hangzhou and Xiamen in China to at least May 3. It expects to resume flights to Beijing and Shanghai on March 29.
• – Lion Air suspended all flights to China from February, and has waived travel change fees for flights up to April 30. (bit.ly/2wDh6O0)
• – LOT extended suspensions until March 28.
• – Lufthansa extended cancellations until April 24.
• – Oman Air suspended flights until further notice.
• – Quantas Airlines’ (QAN.AX) sole remaining route to mainland China, Syndey-Shanghai, has been suspended and its Hong Kong flights are reduced. (bit.ly/39vf3dw)
• – Qatar Airways suspended until further notice.
• – Rwandair suspended until further notice.
• – Saudia, Saudi Arabia’s state airline, suspended flights on Feb. 2.
• – Scoot, Singapore Airlines’ (SIAL.SI) low-cost carrier, suspended until further notice.
• – United Airlines (UAL.O) suspended its Hong Kong service until April 23.
• – Vietjet VJC.HM and Vietnam Airlines HVN.HM suspended flights to the mainland as well as Hong Kong and Macau to April 30.
• also see long list of partial flight suspensions & cancellations

U.S. airlines prepare new flight cuts after new UK, Ireland restrictions – (Reuters) – Delta Air Lines said on Saturday it plans to soon announce additional schedule changes to its European flights after the Trump administration said it was expanding travel restrictions to Britain and Ireland. Vice President Mike Pence said the new travel restrictions will apply to Britain and Ireland starting Monday at midnight. They bar most non-U.S. citizens from entering the United States who have been in the U.K. or Ireland within the last 14 days. They do not bar flights to and from the US or Americans and permanent residents from travel. Washington first imposed restrictions on China and expanded them this week to continental Europe. Last week’s European changes prompted U.S. airlines to cut numerous flights. Delta said Friday it would cut capacity by 40% in the next few months – the largest reduction in its history – and eliminate nearly all flights to continental Europe for the next 30 days. It will also park up to 300 aircraft. United Airlines and American Airlines also announced new cuts to European service on Friday. Major U.S. airlines confirmed on Friday they had been in talks with the White House and Congress about financial assistance. The U.S. Chamber of Commerce late Friday called for urgent action, calling on the U.S. government to “turn next to a package to assist impacted employers… No business should go bankrupt because of a temporary loss in revenue as a result of the coronavirus.” Airlines are reeling from a plunge in bookings and traffic, as the fast-spreading coronavirus pandemic prompts travel restrictions and event cancellations around the world. In Europe, the situation is more dire…

Carnival Halts Global Cruise Operations For 60 Days – Shares of Carnival Corp. plunged by more than 20% on Thursday morning after it announced its Princess Cruises Line would halt operations for 60 days amid the Covid-19 outbreak. This comes after all confirmed cases of the new coronavirus aboard cruise ships have been on Princess vessels. The Diamond Princes has been docked in Yokohama, Japan, with at least 700 confirmed cases. The Grand Princess docked Monday in Oakland, California, has about 21 confirmed cases. In proactive response to the unpredictable circumstances evolving from the global spread of COVID-19 and in an abundance of caution, Princess Cruises announced that it will voluntarily pause global operations of its 18 cruise ships for two months (60 days), impacting voyages departing March 12 to May 10. “Princess Cruises is a global vacation company that serves more than 50,000 guests daily from 70 countries as part of our diverse business, and it is widely known that we have been managing the implications of COVID-19 on two continents,” said Jan Swartz, president of Princess Cruises. “By taking this bold action of voluntarily pausing the operations of our ships, it is our intention to reassure our loyal guests, team members and global stakeholders of our commitment to the health, safety and well-being of all who sail with us, as well as those who do business with us, and the countries and communities we visit around the world,” added Swartz.

Nonstop Acela trains between Washington and New York suspended due to coronavirus – Citing reduced demand for service due to the fears over coronavirus, Amtrak announced Friday evening that it will temporarily suspend its Acela Nonstop trains between Washington and New York.The service will halt the service (trains 2401, 2402 and 2403) from March 10 until May 26, according to a statement from Amtrak. The rail line started the non-stop service last year.The announcement came on the same day Gov. Phil Murphy’s Office announced that a fourth person had tested “presumptive positive” for coronavirus.The Acela became the fastest North American train when it went in service in 2002.Amtrak also announced that there will be no change fees on reservations made through April 30 and that it will increase its cleaning procedures, and add additional sanitizers and disinfectant wipes on its trains and in stations.

Caterpillar Machine Sales Plunge Most In Three Years As Pandemic Paralyzes Heavy Industries – Just in case the world needed yet another confirmation the world’s manufacturing industries, primarily construction and mining, are grinding to a halt, it got one late on Thursday when Caterpillar reported that in February its global machine sales suffered their biggest drop since December 2016. The report, which covers the first full month when the coronavirus pandemic paralyzed China’s economy and was rapidly spreading across the rest of the world “underlines how the coronavirus outbreak is putting a drag on the industries that Caterpillar supplies” according to Bloomberg. While the North American region posted another double digit drop, declining from -11% in January to -12% in February, it was Asia that was hit the hardest, tumbling from a modest, -2% drop in January to a whopping -17% in February, the biggest decline in four years. As Bloomberg further notes, the downbeat mood in the heavy manufacturing industry permeated ConExpo, the largest construction convention in North America. In remarks at the Las Vegas gathering this week, which surprisingly has not been canceled, Caterpillar CEO Jim Umpleby said the coronavirus hasn’t yet caused major supply snags, and the company was focusing on executing the plan set in place when he first took over as CEO. In other words, the real fall in retail sales is yet to come, and may be why Umpleby didn’t offer much detail on how the worldwide move to stamp out the virus will change prospects for the business. “Our guidance was based on the best information that we had at the time, and if we have any changes to that we’ll do it when we put out our first-quarter results,” Umpleby told Bloomberg in an interview. Translation: expect CAT to pull its entire 2020 guidance in the coming days. Fears about the virus’s impact on global growth have helped send shares of the economic bellwether down 38% this year, off to its worst start since 2009.

The Sudden Economic Stop – McBride – I just spoke with a tile sub-contractor who mostly does remodels. He was completely booked for the next several months, and all of his jobs have cancelled for the next 8 weeks. He has a great reputation – and a good network – and he has been busy for years. These cancellations caught him by surprise. He will have to layoff his workers until he finds work.This story is happening all across the country. This is a sudden stop for the US economy like nothing I’ve ever seen.It might take a week or two to show up in the weekly unemployment claims report, but we are going to see a sharp increase in claims. Since this week was the BLS reference week for the March job report, the crisis will probably not have a huge impact on the March report. We don’t know how long this will last, but China is only now slowly recovering – so this might last for several months or even longer.

All 3 US Cities Hit By COVID-19 Show Markedly Lower Weekend Traffic – Almost one month ago, we first looked at TomTom traffic congestion data across various Chinese cities (and a handful of US “control” cities) to assess the impact of the coronavirus pandemic on the broader economy. Overnight, DataTrek’s Nicholas Colas took the TomTom data in his analysis of not only China, but also Italy and that other cluster of covid-19 cases, the U.S. Here is what he found, from his latest Morning Briefing note to clients. We continue to track traffic congestion around the world as a real-time measure of COVID-19’s impact on the global economy. This weekend’s data shows how the virus is affecting consumer demand, in comparison to weekday volumes that highlight commutation patterns. Today we will review the data from 9 major cities around the world, all touched by the virus but at various stages of reaction to the health threat. First, here is the 7-day data for Beijing, Shanghai and Shenzhen (recent week in red, 1-year averages in light blue): Takeaway: while weekday traffic is getting back to normal, weekend congestion is essentially zero in Beijing and Shanghai although somewhat better in Shenzhen. China is clearly getting back to work but leisure travel/shopping is still not yet reaccelerating. Now, here are Milan, Rome and Paris: Takeaway: the northern Italian quarantine is not affecting Milan’s traffic as much as China’s weekend data shows, but Roman congestion shows a marked slowing of economic activity starting Thursday and Paris was well below trend this weekend. Finally, here are Seattle, San Francisco and New York: Takeaway: all 3 US cities affected by COVID-19 show markedly lower weekend traffic than average, and the generally subpar congestion during the middle/later part of the workweek tells us this is not due to the sorts of seasonal patterns we mentioned in our “Markets” section. The upshot from all this: as capital markets have already started to discount, the global consumer is quickly retrenching, led by individuals who live in a city where COVID-19 has taken hold.

Gun Sales Soar Among Asian-Americans After Virus-Related Attacks – The threat of Covid-19 hate crimes across the country is surging this week as Asian Americans in San Gabriel Valley, a region east of Los Angeles, are loading up on weapons as concerns they could be targeted. CBS Los Angeles reported this week that gun sales among Asians are rising in San Gabriel Valley as they believe the pandemic could trigger hate crimes against them. David Liu, the owner of Arcadia Firearm & Safety, said gun sales have jumped in the last two weeks as the virus crisis worsens in California. “Because of coronavirus, a lot of people start to worry,” Liu said. CBS Los Angeles said there’s a high concentration of Asians near the Arcadia gun store. Liu said many of his customers are stocking up on weapons because they fear they might be targeted because of their ethnicity if a local virus outbreak is to occur. “I do worry,” said Daniel Lim, who recently bought a gun and ammo for his wife at Arcadia. Lim said he bought the gun to defend his family amid fears the virus could crash the stock market and economy and lead to massive social unrest where Asians would be targeted. “I hope and pray it never happens,” he said.

Coronavirus Conference Gets Canceled Because of Coronavirus – The Council on Foreign Relations has canceled a roundtable called “Doing Business Under Coronavirus” scheduled for Friday in New York due to the spread of the infection itself. CFR has also canceled other in-person conferences that were scheduled from March 11 to April 3, including roundtables in New York and Washington and national events around the U.S.The CFR’s confabs are joining a long list of canceled or postponed gatherings, including the annual New York auto show. The Greater New York Automobile Dealers Association said Tuesday that the car show will be rescheduled to late August. Events in metro New York are coming under close scrutiny due to an increase in cases in the city and, in particular, an outbreak in the suburb of New Rochelle. The National Guard will be sent to the town to help close public gathering spaces in an effort to slow the spread of the outbreak, Governor Andrew Cuomo said at a press conference. Across the U.S., the spread of the novel virus has so far scuttled more than 50 major corporate events with an estimated attendance of almost 1 million people, according to data collected by Bloomberg News.

Top Biogen execs were present at meeting where attendees had Covid-19 – Biogen’s CEO, chief financial officer, and head of research and development were among those at a corporate meeting last week attended by eight people who later tested positive for the novel coronavirus, and the company said it has taken aggressive steps to prevent other employees from falling ill. The executives – Michel Vounatsos, Jeff Capello, and Alfred Sandrock – attended the annual meeting, according to people familiar with the matter. Biogen on Friday confirmed their attendance at the meeting. The company said the individuals known to have COVID-19, the disease caused by the coronavirus, are currently “doing well, improving and under the care of their healthcare providers.” It added, “Protecting our employees and our communities is our priority.” All of the approximately 175 meeting attendees, with or without flu-like symptoms, have been directed to work from home for two weeks. The company said it was asking all “office-based Biogen employees and contractors” in Massachusetts, Research Triangle Park, N.C., and Baar, Switzerland, to work from home until further notice, and “restricting travel” through the end of the month. In a statement Friday night, Biogen said meeting attendees who are symptomatic would be contacted by public health authorities to be tested, if they haven’t already, and “must quarantine themselves.” They also have been asked to stay isolated from family members or others they live with, “and these close contacts must also be quarantined until further notice,” the statement said.

Amid COVID-19 outbreak, the workers who need paid sick days the most have the least – The United States is unprepared for the COVID-19 pandemic given that many workers throughout the economy will have financial difficulty in following the CDC’s recommendations to stay home and seek medical care if they think they’ve become infected. Millions of U.S. workers and their families don’t have access to health insurance, and only 30% of the lowest paid workers have the ability to earn paid sick days – workers who typically have lots of contact with the public and aren’t able to work from home. There are deficiencies in paid sick days coverage per sector, particularly among those workers with a lot of public exposure. The figure below displays access to paid sick leave by sector. Information and financial activities have the highest rates of coverage at 95% and 91%, respectively. Over half of private-sector workers in leisure and hospitality do not have access to paid sick days. Within that sector, 55% of workers in accommodation and food services do not have access to paid sick days (not shown). Of the public health concerns in the workforce related to COVID-19, two loom large: those who work with the elderly because of how dangerous the virus is for that population and those who work with food because of the transmission of illness. Research shows that more paid sick days is related to reduced flu rates. There is no reason to believe contagion of COVID-19 will be any different. When over half of workers in food services and related occupations do not have access to paid sick days, the illness may spread more quickly.What exacerbates the lack of paid sick days among these workers is that their jobs are already not easily transferable to working from home. On average, about 29% of all workers can work from home. And, not surprisingly, workers in sectors where they are more likely to have paid sick days are also more likely to be able to work from home. Over 50% of workers in information, financial activities, and professional and business services can work from home. However, only about 9% of workers in leisure and hospitality are able to work from home. Many of the 73% of workers with access to paid sick days will not have enough days banked to be able to take off for the course of the illness to take care of themselves or a family member. COVID-19’s incubation period could be as long as 14 days, and little is known about how long it could take to recover once symptoms take hold. The figure below displays the amount of paid sick days workers have access to at different lengths of service. Paid sick days increase by years of service, but even after twenty years, only 25% of private-sector workers are offered at least 10 days of paid sick days a year.

NCAA tournament game in Baltimore held in empty gym for Covid-19 – In what was believed to be the first US sports event held without fans because of the new coronavirus, a Division III men’s basketball NCAA tournament game was played Friday at an empty gym at Johns Hopkins University. Yeshiva University tipped off against Worcester Polytechnic Institute just after 2pm in an arena occupied only by players, referees, employees and media members. The national anthem and starting lineups went on as normal with players giving each other fist pounds instead of handshakes.As students walked by the athletics facility, there were police officers outside and signs on doors reading, “No spectators”. Music blared over the speakers inside and some pre-planned fan announcements, including one promoting social media sharing – “Tell the world you’re here” – went on with no fans to hear them.

March Madness 2020 officially canceled due to coronavirus – The NCAA tournament for men’s and women’s basketball has been canceled, the NCAA announced Thursday, as concerns over the spread of coronavirus continued to rise across the country. The NCAA was slow in making its decision. It announced Wednesday that it would play the tournament without any fans after Ohio and Washington – states that were set to host first and second-round games – had announced a ban of large gatherings. Since then, the NBA, NHL, MLB and MLS all suspended their seasons and every conference basketball tournament was canceled. Prominent voices like TNT analyst Charles Barkley and ESPN analyst Jay Bilas called for the tournament to be postponed Thursday morning, citing the risk for the players even without fans in the buildings.Duke was the first university to say it would not play in the NCAA tournament if one was held, suspending all athletic activities indefinitely. All other winter and spring NCAA championships have also been canceled.

NCAA’s March Madness coronavirus cancellation will cost organization big –The cancellation of NCAA’s lucrative March Madness basketball tournaments on Thursday will jeopardize expected revenue from the most lucrative event in college sports.The NCAA’s Division I men’s basketball tournament generates $867.5 million annually from television and marketing rights alone, according to the institution’s website. The event composes a significant portion of the NCAA’s yearly revenue. In 2019, the NCAA earned an estimated $933 million when factoring in media rights, ticket sales and sponsorships.Ticket revenue was effectively wiped out after NCAA President Mark Emmert moved to cancel the tournaments and other upcoming championship events. That lost revenue alone will cost the NCAA tens of millions of dollars. “Today, NCAA President Mark Emmert and the Board of Governors canceled the Division I men’s and women’s 2020 basketball tournaments, as well as all remaining winter and spring NCAA championships,” the NCAA said in a statement. “This decision is based on the evolving COVID-19 public health threat, our ability to ensure the events do not contribute to spread of the pandemic, and the impracticality of hosting such events at any time during this academic year given ongoing decisions by other entities.”At present, it’s unclear how the NCAA’s decision will affect its broadcast rights deals with CBS and WarnerMedia’s TNT. The unprecedented decision marked a reversal for the NCAA, which indicated on Wednesday that it had planned to proceed with the tournaments without fans in attendance. Revelations on Wednesday night that Rudy Gobert of the NBA’s Utah Jazz tested positive for coronavirus prompted U.S. sports leagues to take fast action. The NBA, NHL, MLB and MLS have all suspended activities. At least 14 NCAA conferences canceled their individual postseason basketball tournaments.

NBA suspends season until further notice, over coronavirus — The NBA has suspended its season “until further notice” after a Utah Jazz player tested positive Wednesday for the coronavirus, a move that came only hours after the majority of the league’s owners were leaning toward playing games without fans in arenas. Now there will be no games at all, at least for the time being. A person with knowledge of the situation said the Jazz player who tested positive was center Rudy Gobert. The person spoke to The Associated Press on condition of anonymity because neither the league nor the team confirmed the test. “The NBA is suspending game play following the conclusion of tonight’s schedule of games until further notice,” the league said in a statement sent shortly after 9:30 p.m. EDT. “The NBA will use this hiatus to determine next steps for moving forward in regard to the coronavirus pandemic.” The test result, the NBA said, was reported shortly before the scheduled tip-off time for the Utah at Oklahoma City game on Wednesday night was called off. Players were on the floor for warmups and tip-off was moments away when they were told to return to their locker rooms. About 30 minutes later, fans were told the game was postponed “due to unforeseen circumstances.” Those circumstances were the league’s worst-case scenario for now — a player testing positive. A second person who spoke to AP on condition of anonymity said the league expects the shutdown to last a minimum of two weeks, but cautioned that timeframe is very fluid. “It’s a very serious time right now,” Miami Heat coach Erik Spoelstra said. “I think the league moved appropriately and prudently and we’ll all just have to monitor the situation and see where it goes from here.”

Coronavirus live updates: PGA Tour cancels multiple events– The Players Championship golf tournament in Florida has been canceled along with all events through the Valero Texas Open, according to the PGA Tour. “It is with regret that we are announcing the cancellation of The Players Championship,” PGA Tour said in a statement. “We have also decided to cancel all PGA Tour events – across all of our Tours – in the coming weeks, through the Valero Texas Open.” The Valero Texas Open ends on Apr 5. Earlier Thursday, PGA Tour Commissioner Jay Monahan said that The Players Championship in Ponte Vedra, Florida and all tournaments in the near future will go on as planned, but without spectators due to the spread of the coronavirus.” The commissioner said he spoke with President Donald Trump and Florida Governor Ron DeSantis earlier Thursday and is in constant communication with local health officials. It’s not just stocks that are getting hammered. The cryptocurrency market saw a huge sell-off in the past 24 hours. The total value of the entire cryptocurrency market plummeted around $93.5 billion in the space of 24 hours as of 10:07 a.m. Singapore time, according to data from Coinmarketcap.com. Bitcoin was down 48% while other digital coins like ethereum and XRP were down 49% an over 42% respectively. Microsoft said Thursday evening it would not be holding its three-day Build conference for developers in Seattle in May as originally planned. About 6,000 people had been expected to attend last year’s Build show. The event will be held online.

• Global cases: At least 125,288, according to the latest figures from the World Health Organization
• Global deaths: At least 4,614, according to the latest figures from the WHO
• US cases: At least 1,663, according to data compiled by Johns Hopkins University.

Coachella Postponed Due To Coronavirus, Organizers Offer Refunds – The Coachella Valley Music and Arts Festival in Indio, California was postponed on Tuesday afternoon as global cases of COVID-19 top 118,000. Organizers moved the April 10-12 and April 17-19 dates to October 9-11 and 16-18 on the hopes that the coronavirus scourge will be behind us by then. “At the direction of the County of Riverside and local health authorities, we must sadly confirm the rescheduling of Coachella and Stagecoach due to COVID-19 concerns,” the organizers said in a statement. “All purchases for the April dates will be honored for the rescheduled October dates. Purchasers will be notified by Friday, March 13 on how to obtain a refund if they are unable to attend.” The cancellation comes after over 18,000 people signed a Change.org petition calling for the event’s cancellation in order to “protect ourselves and California residents by do the right thing before it’s too late.”

Disneyland to Close Due to Coronavirus. Disneyland will shut down operations due to the coronavirus outbreak, The Walt Disney Co. announced Thursday. The closure takes effect Saturday. The drastic move comes on the heels of more cases of the virus being reported. “While there have been no reported cases of COVID-19 at Disneyland Resort, after carefully reviewing the guidelines of the Governor of California’s executive order and in the best interest of our guests and employees, we are proceeding with the closure of Disneyland Park and Disney California Adventure, beginning the morning of March 14 through the end of the month,” the company said in a statement. It added, “The Hotels of Disneyland Resort will remain open until Monday, March 16, to give guests the ability to make necessary travel arrangements; Downtown Disney will remain open. We will monitor the ongoing situation and follow the advice and guidance of federal and state officials and health agencies. Disney will continue to pay cast members during this time.” The news came as something of a surprise as just hours prior, California Gov. Gavin Newsom said Disneyland and other large theme parks were not required to comply with his order against large gatherings to counter the spread of the coronavirus. Newsom noted that he spoke Wednesday with Disney’s executive chairman, Bob Iger, about the situation. Earlier this week, Walt Disney Co. officials tried to ease the concerns of would-be park visitors. Dr. Pamela Hymel, chief medical officer for Disney Parks, said Disneyland and Walt Disney World were already exceptionally clean destinations, but more was being done in the wake of the growing pandemic.

Smithsonian museums, Arlington National Cemetery close amid coronavirus concerns – Two Washington, D.C.- area organizations announced Thursday that they will temporarily close some of the city’s most popular sites amid concerns about the spreading novel coronavirus.The Smithsonian museums and Arlington National Cemetery, as well as both the Kennedy Center and Ford’s Theater, said they will close in an effort to prevent the spread of the coronavirus, citing the need to protect visitors, staff and the general population from the outbreak. “As a public health precaution due to COVID-19 (coronavirus), all Smithsonian museums in the Washington, D.C., metropolitan area and in New York City, including the National Zoo, will temporarily close to the public starting Saturday, March 14,” a press release from the Smithsonian group read.

Coronavirus: The Case for Canceling Everything – We don’t yet know the full ramifications of the novel coronavirus. But three crucial facts have become clear in the first months of this extraordinary global event. And what they add up to is not an invocation to stay calm, as so many politicians around the globe are incessantly suggesting; it is, on the contrary, the case for changing our behavior in radical ways – right now. The first fact is that, at least in the initial stages, documented cases of COVID-19 seem to increase in exponential fashion. On the 23rd of January, China’s Hubei province, which contains the city of Wuhan, had 444 confirmed COVID-19 cases. A week later, by the 30th of January, it had 4,903 cases. Another week later, by the 6th of February, it had 22,112.The same story is now playing out in other countries around the world. Italy had 62 identified cases of COVID-19 on the 22nd of February. It had 888 cases by the 29th of February, and 4,636 by the 6th of March.Because the United States has been extremely sluggish in testing patients for the coronavirus, the official tally of 604 likely represents a fraction of the real caseload. But even if we take this number at face value, it suggests that we should prepare to have up to 10 times as many cases a week from today, and up to 100 times as many cases two weeks from today. The second fact is that this disease is deadlier than the flu, to which the honestly ill-informed and the wantonly irresponsible insist on comparing it. Early guesstimates, made before data were widely available, suggested that the fatality rate for the coronavirus might wind up being about 1 percent. If that guess proves true, the coronavirus is 10 times as deadly as the flu. But there is reason to fear that the fatality rate could be much higher. According to the World Health Organization, the current case fatality rate – a common measure of what portion of confirmed patients die from a particular disease – stands at 3.4 percent. This figure could be an overstatement, because mild cases of the disease are less likely to be diagnosed. Or it could be an understatement, because many patients have already been diagnosed with the virus but have not yet recovered (and may still die).

As coronavirus spreads, CDC warns Americans about traveling inside the U.S. – With the number of confirmed cases of COVID-19 continuing to grow, public health officials have issued a warning to people thinking about traveling within the United States. The Centers for Disease Control and Prevention posted a new guide Wednesday answering common questions about the risks the novel coronavirus pandemic poses to Americans traveling domestically.“CDC does not generally issue advisories or restrictions for travel within the United States,” the agency said on its website. “However, cases of COVID-19 have been reported in many states, and some areas are experiencing community spread of the disease.”Health officials warned that travelers are at high risk of contracting the illness in crowded places, including conferences, public events, religious gatherings, public spaces like movie theaters and shopping malls, and public transportation. The CDC also noted that going to an airport raises your risk of contracting the coronavirus if another traveler there has COVID-19. The CDC noted that travelers should consider whether their home town or the destination they’re planning to visit has a high number of cases. “If COVID-19 is spreading at your destination, but not where you live, you may be at higher risk of exposure if you travel there,” the CDC said. “Consider the risk of passing COVID-19 to others during travel, particularly if you will be in close contact with people who are older adults or have severe chronic health condition.” Additionally, the public health agency warned that those who do decide to travel may be asked by their employer or school to stay home for up to 14 days after traveling to avoid spreading the illness.

Super-rich jet off to disaster bunkers amid coronavirus outbreak – Like hundreds of thousands of people across the world, the super-rich are preparing to self-isolate in the face of an escalation in the coronavirus crisis. But their plans extend far beyond stocking up on hand sanitiser and TV boxsets.The world’s richest people are chartering private jets to set off for holiday homes or specially prepared disaster bunkers in countries that, so far, appear to have avoided the worst of the Covid-19 outbreak. Many are understood to be taking personal doctors or nurses on their flights to treat them and their families in the event that they become infected. The wealthy are also besieging doctors in private clinics in Harley Street, London, and across the world, demanding private coronavirus tests. To avoid overwhelming limited testing facilities, the NHS said it would test only people with a “high chance” of having the illness – meaning people who had had close contact with a confirmed case or who had recently gone to a high-risk country. Mark Ali, chief executive and medical director of the Private Harley Street Clinic, said: “This has led to huge demand from very wealthy people asking if they can pay for private testing. Unfortunately, we are unable to offer testing, as the NHS has said all tests should be done centrally.” The Department of Health and Social Care has mandated that all tests must be carried out by the NHS and Public Health England (PHE).However, an employee at another Harley Street practice, who declined to be named, said their clinic had arranged for concerned clients to be tested in other countries, or for samples to be sent abroad for testing. Ali said his clinic was also offering the worried wealthy an intravenous infusion of vitamins and minerals to boost their immune systems. “We know that 90% of adults have a deficiency in vitamins – what better to improve that than an IV immune boost? An intravenous infusion ensures instant and optimal delivery of these nutrients to the body’s cells and the nutrients should include vitamins such as vitamin C, vitamin B12 complex, glutathione, zinc and essential amino acids such as arginine, taurine, lysine and citrulline.” The treatment costs £350.

California allows employees sickened or affected by coronavirus to file claims for government benefits California Gov. Gavin Newsom (D) announced Tuesday evening that Californians who are unable to work because they are sick with COVID-19, the disease caused by the coronavirus, will now be able to claim short-term disability insurance from the state. “[California] has waived the one-week waiting period for those unemployed or disabled as a result of COVID-19,” Newsom tweeted. “If a medical professional says you’re unable to work, if your hours have been reduced, or your employer has shut down — you can file a claim,” he added. According to the state’s website, the disability insurance covers “60-70 percent of wages (depending on income) and range from $50-$1,300 a week.” Earlier in the week, Newsom prohibited gatherings or events of 250 people or more. California has reported nearly 200 cases of COVID-19 and four virus-related deaths. In the U.S., there have been more than 1,300 confirmed cases and more than 30 related deaths.

Americans adjust to new life, hunker down amid coronavirus –Most big tech companies in San Francisco and Seattle have told employees to work from home, emptying out the downtown neighborhoods that are a hub for tech and venture capital firms. The restaurants, food trucks and other businesses that thrive off lunchtime crowds say that businesses has pretty much ground to a halt. Workers lost their jobs, parents came up with impromptu home lesson plans for children kept home from shuttered schools. Families fretted over dwindling retirement accounts, the health of elderly parents, and every cough and sneeze in their midst. Millions of people settled into new and disrupted routines Thursday as the coronavirus began to uproot almost every facet of American life. The spate of event cancellations that drove home the gravity of the outbreak a day earlier only intensified Thursday, with Disney and Universal Orlando Resort shutting down theme parks, the NCAA calling off March Madness and Broadway theaters closing their doors in Manhattan. All the major professional sports announced they are halting play, and officials ordered a shutdown of every school in the state of Ohio for three weeks. And with the cascade of closures, a new reality set in for American households. In the Pacific Northwest, parents scrambled to devise homeschooling using library books or apps. Others, desperate to get to work, jumped on social media boards to seek child care or exchange tips about available babysitters. Parents rushed to college campuses and drove away with their children’s belongings and bags of their clothing. College officials scrambled to pay for plane tickets home for others. A mother in Seattle organized small outdoor play dates where the kids are told not to get too close to one another. The parents stood awkwardly, several feet apart. Most big tech companies in San Francisco and Seattle have told employees to work from home, emptying out the downtown neighborhoods that are a hub for tech and venture capital firms. The restaurants, food trucks and other businesses that thrive off lunchtime crowds say that businesses has pretty much ground to a halt.

The coronavirus is bringing a painful but much-needed end to an era of economic excess – If you are riding a bicycle across a tightrope high above the ground while standing on the handlebars and doing a juggling act as you go, you need to maintain momentum and avoid shocks at all costs. Any slowing or wobbling could send youcrashing and bring the high wire act to an abrupt and painful end.That’s a pretty good analogy of what’s happening in financial markets and to the global economy. Even a pestilence as virulent as the coronavirus could not be bringing down the economy so quickly and dramatically if it were not already riding precariously high.This is a point many people appear to be missing as they scan the headlines daily for any evidence that the coronavirus spread isslowingand that, therefore, things can revert to “normal” fairly soon with financial markets resuming their ascent and business activity picking up.This will not happen. The economy and financial markets need to take a double fall, first from the coronavirus shock, then from theunsustainable highsthey had reached on the back of seemingly endless monetary easing, low interest rates, inflated asset values and credit-fuelled consumption.That is a long way to fall and the economy that has been performing the most impressive and death-defying balancing act of all – that of the United States – stands to fall most precipitously. As they say, “the bigger (or taller) they are, the harder they fall.”Amid a plethora of economic analyses pouring out almost daily from the likes of the International Monetary Fund, Organisation for Economic Cooperation and Development, UN Conference on Trade and Development and Institute of International Finance, all cataloguing the woes of the macro economy, one from data analytics company J.D. Power in California was particularly ominous. It noted that “two-thirds of US adults are worried that [the coronavirus] will hurt their financial situation [owing to] unexpected medical expenses, inability to work enough hours and declining value of stock portfolios. Consumers are planning to travel less and limit visits to restaurants.”

Coronavirus Will Change How We Shop, Travel and Work for Years – Every economic shock leaves a legacy. The deadly coronavirus will be no different. The great depression spurred a “waste not want not” attitude that defined consumer patterns for decades. Hyperinflation in the Weimar Republic still haunts German policy.The Asia financial crisis left the region hoarding the world’s biggest collection of foreign exchange. More recently, the 2008 global financial crisis drove a wedge through mature democracies that still reverberates, with workers suffering measly pay gains in the decade since.This time it’s a public health emergency that’s shaking up the world economy. In just a matter of weeks, people in affected areas have become accustomed to wearing masks, stocking up on essentials, canceling social and business gatherings, scrapping travel plans and working from home. Even countries with relatively few cases are taking many of those precautions.Traces of such habits will endure long after the virus lock downs ease, acting as a brake on demand. On the supply side, international manufacturers are being forced to rethink where to buy and produce their goods — accelerating a shift after the U.S.-China trade war exposed the risks of relying on one source for components.In the white-collar world, workplaces have amped up options for teleworking and staggered shifts — ushering in a new era where work from home is an increasing part of people’s regular schedule. “Once effective work-from-home policies are established, they are likely to stick,” said Karen Harris, managing director of consultancy Bain’s Macro Trends Group in New York.

“It’s Like Scenes From A Mad Max Movie” – Americans Continue Epic Run On Costco – As concerns of a Covid-19 outbreak increase across the US, Costco stores are experiencing the second weekend of panic-buying of food, water, and hand sanitizers. Last weekend we noted how the “great panic of 2020 is underway” as Americans made a mad dash to Costco stores and other big-box retailers to hoard supplies. Costco CFO Richard Galanti told investors during an earnings call last week that buying panic has “been nuts” adding that he attributes “this to concerns over the coronavirus.”Stock prices for Walmart and Target have also benefited from the spread of the deadly virus, as people preparing for a quarantine situation load up shopping carts with bottled water, canned soup, instant mac and cheese and everything else that they could possibly need to wait out the virus. But the panic-buying has been leading to shortages and leaving people on edge. –WaPoOn the East Coast, tens of millions of Americans woke up on Saturday morning and heard the news about 44 total confirmed virus cases in New York, with a majority in Westchester, a suburb of NYC. PIX11 News’ Cristian Benavides tweeted a video of the panic that is developing in NYC this morning. He shows a long line of cars waiting to get into a Costco in Astoria, a neighborhood in Queens. ABC13 Houston reported, “We’re seeing extremely long line at the Costco on Richmond this morning. Many people are trying to stock up on sanity items and water amid the coronavirus fears.”

No milk, no bleach: Americans awake to coronavirus panic buying – (Reuters) – In Union, New Jersey, a Target opened at 8 a.m. and had sold out of its full stock of milk and bottled water five minutes later. In Austin, Texas, some gas station pumps ran dry. Not a bottle of bleach could be found at a Home Depot in Fairfax, Virginia. As dawn broke across the United States on Saturday, thousands of shoppers lined up outside supermarkets and grocery stores before they opened, eager for a chance to buy essentials that have flown off shelves as the country hunkers down to slow the spread of coronavirus.“It’s crazy. People have gone crazy,” said Alexis Coppol, a Washington, D.C. resident who was shopping at Costco. “I mean, I’m not too worried, but if we get put on a lockdown I want to make sure I have food.”Americans have been stocking up on goods for days. But for many, the severity of the rapidly spreading coronavirus, which causes a sometimes fatal, highly contagious respiratory illness, really started to sink in after President Donald Trump declared a national emergency on Friday, releasing $50 billion in federal aid to help states fight the virus. More than 2,500 Americans have contracted the disease and at least 52 have died. The virus has infected more than 154,000 people worldwide and killed some 5,800 since it was discovered in China in December.

Coronavirus: The psychology of panic buying -Last Saturday afternoon, Kristina Moy decided to swing by her local supermarket in the US city of Seattle to pick up some weekly groceries and supplies for her son’s upcoming baseball tournament.What started as a quick errand turned into a three-hour ordeal, navigating checkout lanes packed with hundreds of shoppers stocking up amid the outbreak of coronavirus. “For the most part, people were understanding and relatively calm. But patience was definitely starting to grow thin,” says Moy, who tweeted images of long queues and people with trolleys loaded with bottled water. “Toilet paper and milk were flying off the shelves faster than I could count, and carbonated water was just about empty.” Moy isn’t the only one to experience long queues and empty shelves. Mass demand for rice and instant noodles in Singapore prompted Prime Minister Lee Hsien Loong to assure the public there was enough to go around. In Auckland, New Zealand, supermarket spending shot up 40% last Saturday compared to the same day a year ago. And shoppers in Malaysia wanting to pad “pandemic pantries” – grocery hoards to fill people’s kitchens until the crisis dies down – have driven an 800% increase in weekly hand sanitiser sales. (All of those places have confirmed cases of Covid-19.) These are the real-world consequences of panic buying – a phenomenon that happens in the face of a crisis that can drive up prices and take essential goods out of the hands of people who need them most (such as face masks for health workers). So why do people do it? Experts say the answer lies in a fear of the unknown, and believing that a dramatic event warrants a dramatic response – even though, in this case, the best response is something as mundane as washing your hands. “It is rational to prepare for something bad that looks like it is likely to occur,” says David Savage, who’s written about the rationality behind stocking up in a crisis. However: “It is not rational to buy 500 cans of baked beans for what would likely be a two-week isolation period.”

The psychology of stockpiling: Why people are panic buying toilet paper –Panic buying has been rife amid the global spread of the new coronavirus, with consumers around the world stockpiling goods like hand sanitizer, canned foods and toilet paper.The trend has seen stores ration products, with U.K. retailers limiting sales of hand hygiene products while Australian shoppers have seen restrictions on the amount of toilet paper they can buy. Psychologists spoke to CNBC to weigh in on why our brains push us to panic buy – even when authorities are assuring the public there’s no need to.According to Paul Marsden, a consumer psychologist at the University of the Arts London, the short answer can be found in the psychology of “retail therapy” – where we buy to manage our emotional state.“It’s about ‘taking back control’ in a world where you feel out of control,” he said. “More generally, panic buying can be understood as playing to our three fundamental psychology needs.”Those needs were autonomy, or a need for control, relatedness, which Marsden defined as “we shopping” rather than “me shopping,” and competence, which is achieved when making a purchase gives people a sense that they are “smart shoppers.”Meanwhile, Sander van der Linden, an assistant professor of social psychology at Cambridge University, said there were both generalized and coronavirus-specific factors at play.“In the U.S., people are receiving conflicting messages from the CDC and the Trump administration,” he said. “When one organization is saying it’s urgent and another says it’s under control, it makes people worry.”President Donald Trump downplayed the impact of the U.S. coronavirus outbreak on Twitter this week, with a disconnect reportedly widening between the administration and U.S. health authorities. The virus is now present in at least 35 states, according to the Centers for Disease Control and Prevention (CDC).More generally, a “fear contagion” phenomenon was taking hold, van der Linden added. “When people are stressed their reason is hampered, so they look at what other people are doing. If others are stockpiling it leads you to engage in the same behavior,” he said. “People see photos of empty shelves and regardless of whether it’s rational it sends a signal to them that it’s the thing to do.”

Teachers pay out-of-pocket to keep their classrooms clean of COVID-19: Teachers already spend on average $450 a year on school supplies “I keep my surfaces as clean as possible, wipe down tables every day, and use sanitizer, but it becomes an expense, because the district doesn’t give us wipes or sanitizer for our classrooms,” Kristin Luebbert, a teacher at the U School in North Philadelphia, recently told The Philadelphia Inquirer. “It’s just a worry – what’s the plan and how are we going to be safe?”With fears over COVID-19 spreading throughout the nation’s classrooms, there is understandably a push to maintain cleanliness in all schools. Even the Centers for Disease Control weighed in with recommendationsfor schools and teachers in particular too: clean and disinfect frequently touched surfaces and objects in the classroom.The question is who’s going to pay for the products needed to protect students and teachers? Turns out, some teachers are using their own money to cover the cost of things such as hand sanitizers and wipes, according to some published reports on the issue. That expense is in addition to the, on average, $459 teachers spend on school supplies for which they are not reimbursed (adjusted for inflation to 2018 dollars),found an analysis by Economic Policy Institute economist Emma Garc’a. “What’s ahead for teachers in light of the threat of COVID-19 spreading will only add to the existing challenges and stress,” predicts Garc’a. “Teachers already act as first respondents when it comes to children’s basic needs, and schools are the only place where some students can have access to hot meals, medical care, washing their dirty laundry, or even to shelter. These, as well as the expense outlays, are worse in schools serving larger shares of low-income students.”

Coronavirus school closings: Ohio, Maryland shut all K-12 schools – Twelve states and a number of large urban school districts – including Los Angeles, the nation’s second-largest – are shutting down all K-12 schools as part of a sweeping attempt to contain the spread of the coronavirus. Ohio, Maryland, Oregon, New Mexico, Michigan, West Virginia, Virginia, Louisiana, Illinois, Wisconsin, Washington and Alabama have ordered all schools closed. The governor of Kentucky has recommended closing all schools in that state. Major metropolitan districts in Atlanta, Denver, San Francisco, San Diego, Washington, D.C. and Austin, Texas have also shuttered. And a growing number of smaller districts around the country have also chosen to close.The actions are the first wave of widespread school closings in the U.S., and they stand to upend school and family routines for millions of children. According to a count updated mid-afternoon Friday by Education Week magazine, about a quarter of American schoolchildren had been or were scheduled to be affected by a school closure – and that was before some states announced their actions. Such closures will throw into sharp relief the deep socioeconomic divides in American education. Disadvantaged families who rely the most on schools for stable services, such as meals and access to learning materials, will be some of the most negatively affected.“Wide-scale learning loss could be among the biggest impacts coronavirus has on children in America,” said Betsy Zorio, vice president of U.S. programs at Save the Children, an international children’s charity. “With an unprecedented number of school closures already announced and many more expected, ensuring that children can continue to learn is essential.”The effects on children will be particularly acute in places like Los Angeles, where the school district serves more than 600,000 students. Roughly 80 percent of students there rely on their school for lunch. More than 20,000 are homeless.Ohio Gov. Mike DeWine kicked off the wave of statewide closures Thursday when he announced that all K-12 public, charter and private schools in Ohio will be shut down for three weeks starting Monday to try to contain the spread of the virus. Shortly after the Ohio announcement, Maryland’s superintendent announced the state’s schools would close for two weeks starting Monday. Other states followed, most closing for two or three weeks. In Washington, the first state to have an outbreak spreading in the community, Gov. Jay Inslee ordered all schools closed by Tuesday through April 24 – about six weeks.

Coronavirus in N.Y.C.: Why Closing Public Schools Is a ‘Last Resort’ –NYT – New York City has the largest public school system in the United States, a vast district with about 750,000 children who are poor,including around 114,000 who are homeless.For such students, school may be the only place they can get three hot meals a day and medical care, and even wash their dirty laundry.That is why the city’s public schools will probably stay open even if the new coronavirus becomes more widespread in New York. Richard A. Carranza, the schools chancellor, said earlier this week that he considered long-term closings an “extreme” measure and a “last resort.”There are no plans to shut schools down, and Mayor Bill de Blasio said on Friday that none of the city’s 1.1 million public school students had shown any symptoms of the virus. The federal Centers for Disease Control and Prevention have advised that, so far, children have been less likely than adults to become infected.Even a single snow day can seriously disrupt the lives of New York’s most vulnerable children and their parents and other relatives, whose jobs often do not provide paid time off, said Aaron Pallas, a professor of education at Columbia University’s Teachers College.“Kids will need to be supervised,” Professor Pallas said. “And there are complex interactions here that affect the well-being of families.” Large-scale school closings might mean, for example, that subway conductors and bus drivers must stay home with their children, or that nurses at public hospitals would not be able to come to work, potentially slowing essential city services. Although millions of students around the world have already had their schools close because of the virus, such a move would present a major challenge for a district where many children do not have internet access at home, making remote learning nearly impossible.

Coronavirus prompts Berea College to shut down for the year ‘out of an abundance of caution’ –Berea College President Lyle Roelofs announced Tuesday that the private college in Madison County will end the academic year Friday and send students home out of concern over thecoronavirus.“Concluding, after careful analysis, that it will not be possible to adequately assure student and employee safety in the circumstance of a case of COVID-19 occurring on campus, we have decided that the College will cease instructional activities as of the end of the day on this Friday, March 13,”Roelofs said in a letter to the college community.Berea spokesman Tim Jordan said there were no cases reported on campus and the action was being taken “out of an abundance of caution.”The letter said instruction should not continue, although assignments for students to complete and submit can be part of the plan and electronic communications may continue. The due date for final grades will not change.Students are asked to return home Saturday and to vacate residence halls. Jordan said school officials anticipate that as many as 200 of the college’s 1,600 students won’t be able to return home immediately and they will be allowed to stay on campus until they can make arrangements. The school may help with travel costs.Universities across the United States were canceling in person classes for the remainder of the year and transitioning to virtual courses including Harvard University. Transitions from in-person classes to virtual learning were also being made at Princeton, Amherst, University of California, Berkeley and Indiana University.

Tulane University tells all students to move out – In an email sent to students today (Mar. 11) Tulane President Mike Fitts is telling all students to move out of the residence dorms by the end of next week (Mar. 22). This is in addition to the University’s changing all courses to online classes. According to the email, “all uptown, on-campus students should prepare to move out of their residence halls for the remainder of the semester.” The email does not say how the students in dorms will pay for rentals in New Orleans. It does say that students, such as international students, who have “difficulty returning home” should submit a request for an “exception to moving off campus.” However, “all faculty and staff are expected to report to work as normal,” using “social distancing measures.” We will update this story as more information becomes available.

Harvard’s “Let Them Eat Veritas”: Richest University’s Poor Students Shafted as School Provides Spotty, Inadequate Help as It Throws Them Out of Dorms and Jobs -Yves Smith – Harvard University should be ashamed of itself. It has dumped the problem of its sudden closure due to coronavirus largely on the students themselves and their families. While most of them are affluent enough to handle the financial fallout of buying airfare at the last minute and storing or shipping their clothes, books, and other possessions, Harvard’s students from lower income backgrounds have, to a significant degree, been left in the lurch. I learned about this train wreck via an e-mail from a foundation affiliated with my undergraduate house1 asking for alumni to pitch in: As some of you already know, the College suddenly announced yesterday in the middle of exam week that due to the COVID outbreak, all students must leave their dorms by Sunday and that classes would resume online sometime next week. This has placed incredible strains on everyone – staff, student professors alike, – but particularly on our lower income, first generation students, as you can read in the Crimson. this crisis requires students to pay to store or ship their things, as well as to buy airline tickets home on short notice. Additionally some of our international students who can’t return home will have to remain isolated on campus, and others will be returning home to areas with slow or no internet service which will make participating in online classes next to impossible. The Harvard Crimson piece mentioned in the e-mail describes in detail how low-income students have been turfed out, framing as students having been given an eviction notice on Tuesday to get out by Sunday. The school will not reopen after spring break. Key details: Some students must ship or store their on-campus belongings without financial support from Harvard. Others who planned to stay on campus must now book unexpected flights home and accrue additional costs. And those who rely on term-time employment must confront additional financial concerns as they lose their primary sources of income….

Coronavirus could halt the world’s emissions growth. Not that we should feel good about that. Emissions are already way down in China, the world’s largest yearly contributor to climate change. Humans have seemed unable to get a handle on climate change, with global emissions of greenhouse gases continuing to grow every year. But a microscopic pathogen, so structurally simple that it does not even have a single cell and is arguably not even alive, may be capable of accomplishing what our political leaders thus far cannot.Experts say that greenhouse gas emissions in China, the world’s largest current contributor to climate change, are down 25 percent in recent weeks as the country conducted a massive societal intervention to stop the spread of the virus. Air pollution is also down, due to decreased driving and less coal burning.Meanwhile, as the virus enters a second phase, spreading beyond China to other countries, it is dampening global demand for oil and air travel, and threatening overall global economic growth. All of these are strongly linked to greenhouse gas emissions.While it’s too early to say for sure, if these trends continue, the coronavirus could join rare company. Since the year 1900, greenhouse gas emissions have risen dramatically. During that period, the escalation of emissions has been nearly constant, with 2019 projected to set yet another record high. And when significant declines have happened, it’s usually been because of world wars, sweeping economic contractions or large-scale geopolitical events such as the fall of the Soviet Union. The last time global emissions fell noticeably was in the wake of the Great Recession, from 2008 to 2009 – when U.S. GDP fell 4.3 percent, unemployment doubled from 5 to 10 percent, housing prices crashed and the stock market lost, at the nadir, more than half of its value. But even in that moment of economic and societal trauma, the global emissions decline was fleeting. Emissions started to rise again almost immediately. Still, if the current emissions contraction that happened first in China spreads around the world, and is sustained, then it might cause a similar impact. Elizabeth Economy, a China expert at the Council on Foreign Relations, said the nation’s emissions have increased every year for the past three until coronavirus paralyzed entire regions. “If there is a bright side to the coronavirus,” she said, “it is that the drop in industrial production, manufacturing, and automobile use will produce a noticeable drop in CO2 emissions for at least the first two months of the year.” Granted, the bounce back could be rapid if China tries to juice its economy through some type of stimulus once the situation stabilizes. South Korea has already enacted roughly $10 billion in stimulus in the wake of the virus’s spread, and Italy is planning an infusion of $8.4 billion.

Three charts that explain what coronavirus is doing to climate emissions – The quickly spreading coronavirus has closed schools, constricted travel, shaken markets and infected more than 100,000 people. It is also already having impact on the environment: The buildup of climate-warming emissions has dipped amid the outbreak.The spread of a novel coronavirus around the world is nothing to celebrate. But it’s true that dampened demand for electricity, oil and air travel in China has led to a drop in greenhouse gas emissions in that country, the world’s largest contributor to climate change. And as the virus spreads, it may further weigh on economic activity in other nations and decrease their emissions.These three charts explain what has happened to emissions during the outbreak – and where we may be going:

• 1. The economy in China, the world’s largest emitter, has contracted. And that downturn may be best seen by looking up. More than a dozen airlines have scaled back service in China, where the outbreak began late last year. From Jan. 23 to Feb. 13, the number of daily departures and arrivals fell from 15,072 to just 2,004,according to the New York Times: The air travel industry is just one of many affected by the virus. “If there is a bright side to the coronavirus,” Elizabeth Economy, a China expert at the Council on Foreign Relations, told The Post, “it is that the drop in industrial production, manufacturing, and automobile use will produce a noticeable drop in CO2 emissions for at least the first two months of the year.”
• 2. So now there is less air pollution in China. As my colleagues Chris Mooney, Brady Dennis and John Muyskens report, carbon emissions in China are down at least a quarter over February. So, too, has small-particle air pollution decreased. And most dramatically of all, concentrations of another pollutant released by burning fossil fuels called nitrogen dioxide – pictured below – are down also about 40 percent.
• 3. But don’t expect it to last. Past crises – including the Great Depression, the oil shortages in the 1970s and, yes, an influenza pandemic in 1918 – have spurred drops in emissions before. But those declines proved to be fleeting. After the global economy regained its footing following the last dip during 2008 financial crash, for example, “[e]missions started to rise again almost immediately,” Mooney, Dennis and Muyskens write.

Why the coronavirus outbreak is terrible news for climate change – It appears increasingly likely that the global coronavirus outbreak will cut greenhouse-gas emissions this year, as deepening public health concerns ground planes and squeeze international trade. But it would be a mistake to assume that the rapidly spreading virus, which has already killed thousands and forced millions into quarantine, will meaningfully reduce the dangers of climate change. As with the rare instances when worldwide carbon pollution dipped in the past, driven by earlier economic shocks, diseases, and wars, emissions are likely to rise again as soon as the economy bounces back. In the meantime, if the virus leads to a full-blown global pandemic and economic crash, it could easily drain money and political will from climate efforts. In fact, we absolutely should dedicate the bulk of our international attention and resources to the outbreak at this moment, given the grave and immediate public health dangers. Still, the fear is that the highly contagious coronavirus could complicate the challenges of climate change – which presents serious, if longer-term, threats of its own – at a point when it was crucial to make rapid strides. There are several ways this could happen:

• If capital markets lock up, it’s going to become incredibly difficult for companies to secure the financing necessary to move ahead with any pending solar, wind, and battery projects, much less propose new ones.
• Global oil prices took a historic plunge on Monday, driven by a price war between Russia and Saudi Arabia as well as coronavirus concerns. Cheap gas could make electric vehicles, already more expensive, a harder sell for consumers. It’s why Tesla’s stock crashed on Monday.
• China produces a huge share of the world’s solar panels, wind turbines, and lithium-ion batteries that power electric vehicles and grid storage projects. Companies there have already said they’re grappling with supply issues as well as declines in production and shipments, which have in turn slowed some renewables projects overseas. Any resulting clampdown on trade with the nation where the outbreak originated, which some members of the Trump administration are pushing for, will only further disrupt these clean-energy supply chain and distribution networks.
• Rising health and financial fears could also divert public attention from the problem. Climate change has become an increasingly high priority for average voters in recent years, and the motivating force behind a rising youth activist movement around the world, building pressure on politicians to take serious action. But in the midst of an economic downturn and public health crisis, people would understandably become more focused on immediate health concerns and pocketbook issues – i.e. their jobs, retirement savings, and homes. The longer-term dangers of climate change would take a back seat.

China: A negative trade balance from Covid-19 – ING – China’s exports were just as expected – at negative growth. But imports were less negative as imports of medical-related supplies surged during February. That yields a negative trade balance for China, it’s first since March 2018 Exports were smaller than imports for China in January and February, which resulted in a trade deficit of US$7.1 bn. The last time that China had a trade deficit was in March 2018, at the start of the trade war with the US, when the trade deficit was nearly US$5.8bn. Imports fell only 4% year-on-year YTD in February. This is a surprisingly low negative growth figure.In January and February, China imported an increased value of medical-related supplies, eg, raw materials to produce masks, which falls into the category of textiles and rubber, and latex for hospital beds. Part of this was donations from the rest of the world. Imports from donations increased by more than 4000% YoY YTD, to fight Covid-19.Exports fell 17.2% YoY YTD in February, as expected. Factories were closed for most of January and February due to the Chinese New Year Holidays and the coronavirus, and thus we could hardly expect positive growth in exports. Though we do not expect a V-shape rebound in production and exports in March, we believe that China will not receive more donations from the rest of the world. Almost the opposite, we expect China to export some medical supplies to other countries that need help to fight the coronavirus. As such, we believe that even though China’s trade could be in negative growth on a yearly basis in March, the trade balance should turn positive. We have revised our GDP forecasts for China in 1Q20 to 4.4% YoY. Our forecast is now at risk as we did not expect a trade deficit in the first two months of the first quarter. But we have seen increasingly more fiscal stimulus from the central government, which is also ahead of our expectations. For the time being, we keep our forecasts at 4.4% YoY for 1Q20.We do not think that the People’s Bank of China is going to weaken the yuan to boost exports as what we have seen so far is that the USDCNY has moved in tandem with the dollar index. So the yuan, in fact, has been stronger from the weakest level this year at 7.03 per dollar on 24 February to 6.93 on 6 March. If the dollar gets stronger due to the flight to safety from the fear factor of the spreading of Covid-19, then the yuan could weaken to 7.05 by the end of March.

Chinese exports get crushed – The news from China’s February macro data came through at the weekend, and it’s not promising for any company exposed to the global supply chain. Which means most of them. From the team at UBS: China started to release combined January-February trade data since March 2020. Nominal export growth dipped down sharply from 7.9%y/y in December 2019 to -17.2%, in line with our expectation. Both ordinary exports and processing exports declined notably. The weakness is also witnessed across all major export destinations, with US and Japan contracting by over -20%y/y, EU by -18%, and HKT (Hong Kong, Korea, Taiwan) -17%. The softness in Jan-Feb export activities was mainly led by fewer working days, production suspension and strict traffic restrictions imposed after COVID-19 outbreak. In addition, higher tariffs from September tariff hike may still weigh on the exports of the $110bn Chinese products. Indeed, the latest US Census data suggest the $110bn list saw another decline of -28%y/y in January. Meanwhile, exports for products on the Dec tariff list ($160bn) dipped further from -3.7%y/y in December to -15.6% in January, possibly pointing to some paybacks from previous front-loading. Yet there’s better news for China’s FX reserves, and therefore the renminbi: With exports dipping down notably, Jan-Feb recorded goods trade deficit of $7.1bn. Meanwhile, the collapse of outbound travel may have led to a much narrower service trade deficit. Together with largely stable capital outflow pressure, mild valuation loss (~$8bn) due to stronger USD, but some valuation gain from notable decline of DM government bond yields, headline FX reserve only edged down by $8.8bn to $3.107 trillion. On the other hand, RMB exchange rate appreciated modestly in the past several weeks thanks to notable decline of new confirmed cases in China, increasing worries of wider global COVID-19 spread, and weaker dollar partly on Fed’s unexpected rate cuts. We expect CNY to stay largely stable in 2020, trading around 7 by end-2020.

Apple Suffers Doomsday Plunge In iPhone Shipments Across China –Alternative data first showed us the incoming economic crash developing in early February, only to be confirmed weeks later. Twin shocks plague the Chinese economy, which is a supply shock with manufacturers operating at less than full capacity, along with a demand shock, where consumers have been confined to their homes in forced quarantine, unable to spend. So, on Monday morning, when new data from the China Academy of Information and Communications Technology (CAICT) reveals Apple smartphone sales in China were halved in February, this really shouldn’t surprise ZeroHedge readers, considering they’ve been well informed about what would happen next. And it wasn’t just Apple with plunging activity, all mobile phone brands operating in China saw shipments halved over the month. CAICT said 6.34 million devices were shipped last month, down 54.7% from 14 million in the same month the previous year. This was the lowest level of February shipments since 2012, when the CAICT data first became available. Android brands, including Huawei and Xiaomi, accounted for most of the drop, collectively saw shipments at 5.85 million units for the month, compared to 12.72 million units last year. Apple shipped 494,000 last month, down from 1.27 million in February 2019.The collapse of the smartphone industry in China was described well in advance, where we explained China’s smartphone shipments were expected to halve in the first quarter: China Mobile Phone Sales Crash Most On Record. And while alternative data of China’s economy continues to print without a heartbeat, recently confirmed by crashing state data, consumption woes will likely plague the smartphone industry for the full year.

After 79% Sales Crash In February, China Automakers Beg Government For Bailout – We had been reporting China’s February auto sales numbers on a week by week basis, so Zero Hedge readers knew they were going to be ugly for the month. They just didn’t know how ugly. Industry wide, sales fell 79% in February, marking the biggest ever monthly plunge on record, according to Reuters. And the industry is starting to panic. Automakers are now asking the government for relief after the industry’s collapse, which occurred in the midst of an already-in-progress global recession for automakers. Specifically, they are asking for cuts on the purchase tax for smaller vehicles and support for sales in rural markets, in addition to the easing of emission requirements. Sales for February fell to just 310,000 vehicles from a year earlier, marking the 20th straight month of declines. Chen Shihua, a senior CAAM official said: “China’s auto sales for February returned to levels not seen since 2005.” And the once silver lining of EV sales is no longer. New energy vehicles contracted for an 8th month in a row as the CAAM pleaded the government for more subsidies on NEVs. Yale Zhang, head of Shanghai-based consultancy AutoForesight, said: “The government will consider these proposals but it is unlikely they will launch so many policies. Measures like cuts to the purchase tax, support for rural markets and easing purchase restrictions on new energy vehicles are reasonable and would have an immediate impact.”

Chinese Piglet Prices Hit Record High On Virus Disruptions – Piglet prices in China soared to record highs on Thursday (March 5) amid supply chain woes that persist from the Covid-19 breakout. Farmers have been attempting to rebuild their herds as supplies remain tight after African swine fever decimated 40% of the country’s pig supply in 2019. Chinese spot prices for piglets jumped to a record high of 126 yuan ($18.11) per kilogram last week, nearly a 600% increase since the start of 2019. The latest surge in prices was attributed to supply chain disruptions as transportation networks across China remained closed due to virus containment measures, which prevented farmers from shipping piglets to meat markets, said Financial Times. The virus crisis complicates things for Beijing, who has attempted to arrest soaring food inflation via the release of thousands of tons of pork from state reserves. However, with quarantines still in effect across the country, this has prevented farmers from expanding herds and supplying local markets. “The record price is because of scarce supplies of piglets,” Lin Guofa, senior analyst at Bric Agriculture Group, a Beijing-based agriculture consulting firm, told Bloomberg. Yang Zhenhai, the head of the ministry’s animal husbandry bureau, told reporters last week that a shortage in pigs across the country has been due to lack of creating new pig farms, restocking herds, and the ability to transport animals to markets following the virus outbreak.

‘The new normal’: China’s excessive coronavirus public monitoring could be here to stay – Over the last two months, Chinese citizens have had to adjust to a new level of government intrusion. Getting into one’s apartment compound or workplace requires scanning a QR code, writing down one’s name and ID number, temperature and recent travel history. Telecom operators track people’s movements while social media platforms like WeChat and Weibo have hotlines for people to report others who may be sick. Some cities are offering people rewards for informing on sick neighbours. Chinese companies are meanwhile rolling out facial recognition technology that can detect elevated temperatures in a crowd or flag citizens not wearing a face mask. A range of apps use the personal health information of citizens to alert others of their proximity to infected patients or whether they have been in close contact. State authorities, in addition to locking down entire cities, have implemented a myriad of security measures in the name of containing the coronavirus outbreak. From top officials to local community workers, those enforcing the rules repeat the same refrain: this is an “extraordinary time” feichang shiqi, requiring extraordinary measures. As the number of new infections in China falls, having infected more than 80,000 and killed more than 3,000, residents and observers question how much of these new measures are here to stay. “I don’t know what will happen when the epidemic is over. I don’t dare imagine it,” said Chen Weiyu, 23, who works in Shanghai. Every day when Chen goes to work, she has to submit a daily health check to her company, as well as scan a QR code and register in order to enter the office park. “Monitoring is already everywhere. The epidemic has just made that monitoring, which we don’t normally see during ordinary times, more obvious,” she said. Others are more emphatic about the future. Wang Aizhong, an activist based in Guangzhou, said: “This epidemic undoubtedly provides more reason for the government to surveil the public. I don’t think authorities will rule out keeping this up after the outbreak.” “When we go out or stay in a hotel, we can feel a pair of eyes looking at us at any time. We are completely exposed to the monitoring of the government,” he said. .

Even mask-wearers can be ID’d, China facial recognition firm says (Reuters) – A Chinese company says it has developed the country’s first facial recognition technology that can identify people when they are wearing a mask, as most are these days because of the coronavirus, and help in the fight against the disease. China employs some of the world’s most sophisticated systems of electronic surveillance, including facial recognition. But the coronavirus, which emerged in Hubei province late last year, has resulted in almost everyone wearing a surgical mask outdoors in the hope of warding off the virus – posing a particular problem for surveillance. Now Hanwang Technology Ltd, which also goes by the English name Hanvon, said it has come up technology that can successfully recognize people even when they are wearing masks. “If connected to a temperature sensor, it can measure body temperature while identifying the person’s name, and then the system would process the result, say, if it detects a temperature over 38 degrees,” Hanwang Vice President Huang Lei told Reuters in an interview. The Beijing-based firm said a team of 20 staff used core technology developed over the past 10 years, a sample database of about 6 million unmasked faces and a much smaller database of masked faces, to develop the technology,

Wuhan Students Get Homework Software Banned From App Store By Spamming It With One Star Ratings – In what is likely the most epic story to come out of China as a result of the coronavirus so far, locked down students in Wuhan have found a creative way to avoid doing their homework while schools are closed. While schools have been suspended, teachers have been using an app called DingTalk to assign their students online lessons and homework, despite the lockdown. After the app was introduced, however, students who were happy to be on lockdown beforehand grew annoyed with having to do work, according to the London Review of Books. So they engineered their own solution and decided to take action. Students figured out eventually that if they had enough users spam the app with one star ratings, they could get it kicked off of the app store, which would then in turn prevent them from having to do homework. As a result, “thousands of reviews” flooded into and DingTalk saw its app rating fall from 4.9 to 1.4 overnight. Via technode According to the report, “the app has had to beg for mercy” on social media, stating: ‘I’m only five years old myself, please don’t kill me.’ Not much out of the country has given us hope since the coronavirus outbreak began, but this story should possibly give future generations optimism about young Chinese citizens’ eagerness to band together and overthrow authority. And to the teachers, it’s already bad enough the kids are suffering through what is likely going to be one of the most impactful pandemics of modern times. Maybe you can cut them a break on the book reports for the time being.

South Korea is quarantining and burning cash to prevent spreading the coronavirus – The Bank of Korea (BOK), South Korea’s central bank, is now keeping all cash it receives from local banks in a safe for two weeks because the coronavirus generally dies out during that time, according to Reuters. The country is also reportedly tightening its processes for incinerating bank notes that might be infected or otherwise dirty as the outbreak spreads. The BOK will also continue using its standard process for disinfecting cash before putting it in circulation, in which it heats notes to 150 C (302 F) and then leaves them at 42 C (108 F) after they’re packaged. These efforts reflect growing concerns about cash’s ability to spread the coronavirus. Cash can carry hundreds of species of microorganisms, so some entities are trying to limit its use to combat the outbreak. Chinese banks were previously required to only release bank notes that had been sterilized and to store potentially infected cash for one to two weeks, per CNBC. Additionally, the country put a stop to cash transfers between provinces. And the concerns have reached a global scale, with the World Health Organization (WHO) advising consumers to use contactless payments over cash when possible. Precautions and restrictions surrounding the usage and availability of cash could bolster digital payments adoption, but payments firms may still face losses because of the outbreak. The quarantining and incineration of cash, combined with recommendations to not use cash, could convince consumers to make payments through other methods. If governments continue to store or destroy potentially infected cash, there could be less cash in circulation, making it harder for consumers to make cash payments. And if consumers are concerned about the spread of the virus and heed the WHO’s advice, they’ll make a point to avoid using cash until the outbreak subsides. This could mean that consumers around the world turn to cards, devices, and other payment methods to limit their exposure to cash, boosting digital payments adoption globally. Even if the outbreak popularizes noncash payments, it could still hurt digital payments firms’ performances because it may lessen overall spending. Many US consumers are already avoiding public venues like malls and stores, likely lowering their in-store spending. So, concerns about cash may mean payments firms will see some spending shift to digital payment methods, but ultimately may cause their overall volume to drop. And payments firms certainly appear to be gearing up for coronavirus to hurt their performances, as Mastercard, PayPal, and Visa have all signaled that the outbreak may negatively impact their future revenues.

Korean right wing politicizing epidemic – After the impeachment of Park Geun-hye, the former president of South Korea who had been involved in a series of corruption scandals, Moon Jae-in, a left-leaning political stalwart, became the country’s new leader. Then lawmakers in the opposition conservative parties started to denounce the president for absurd reasons.The conservatives expressed a negative view on Moon’s efforts to invite the North Korean national team to the 2018 Pyeongchang Olympics. They claimed that the Moon administration was imposing oppressive rule under the name of reforming the tarnished prosecution system. And now, right-leaning politicians are attacking Moon’s government for the surge in Covid-19 infections, stirring up criticism against his regime.By the end of February, Covid-19 cases started to surge across South Korea. Currently, this country has the most confirmed cases of the disease outside of China, where the coronavirus that causes it was first identified. Conservatives have accused the Moon administration of failing to deal with the disease properly.Hwang Kyo-ahn, the leader of the conservative United Future party, condemned what he called the government’s failure to deal with Covid-19.“The president, the prime minister and the entire government were too idle in their responses to the virus,” The Korea Times quoted Hwang as saying. “The current crisis has been caused by the government’s failure. The entry ban on China should have been implemented from the very beginning, as requested consistently by the people and experts. But the president did not listen.”Also making bitter criticisms against the government, Han Sun-kyo, a lawmaker with the right-leaning Future Korea party, urged Moon Jae-in to offer an apology to all citizens for failing to prevent the spread of Covid-19. “The government should have to impose a strict entry ban on Chinese,” Han said. “But the president was passive to do so, just kowtowing to China, as it is one of the biggest trade partners of Korea. With the incompetence of the minister of health and welfare, the government’s poor response to Covid-19 led thousands of citizens to be infected. Until now, Covid-19 is growing exponentially, and citizens are fretting that they could be infected.”

Coronavirus could delay Tokyo Olympics by up to two years, Japanese official suggests, but IOC says Games preparations continue – –A delay of one or two years would be the “most feasible” option if the Tokyo Olympics cannot be held as planned this year due to the global coronavirus outbreak, a member of the organising committee’s executive board has said. But the International Olympic Committee (IOC) said on Wednesday “the preparations for the Olympic Games Tokyo 2020 are continuing as planned”. Haruyuki Takahashi, one of more than two dozen members of the Tokyo 2020 executive board, who suggested the delay, said the Tokyo 2020 organisers had just started looking at scenarios for how the virus could affect the Games. Mr Takahashi has earlier told the Wall Street Journal that the board had not discussed the impact of the virus, having last met in December before the epidemic spread. Organisers have been pushing a consistent message that the Games would not be cancelled or postponed but sponsors who have pumped in billions of dollars have grown increasingly nervous about how the coronavirus outbreak will impact the event. Meanwhile, the final decision over the Tokyo Olympics belongs to the powerful International Olympic Committee chief (IOC), Thomas Bach. Mr Bach gave his unequivocal backing to the Games ahead at last week’s committee executive board meeting in Switzerland.

Tokyo 2020 chief insists Games are on track despite coronavirus outbreak –Olympic organisers have insisted the Tokyo Games will go ahead as planned in July despite the sharp spike in Covid‑19 cases across the globe. Yoshiro Mori, the Tokyo 2020 Olympics chief, said his team were not considering changing plans for the Games – and that a board member who had suggested a delay because of the coronavirus had apologised. Sources at the International Olympic Committee are also stressing that nothing has changed, with those in the organisation pointing out there is still more than four months before the Games begin. Senior IOC figures will be in Olympia on Thursday to watch the Olympic torch being lit at the ancient temple of Hera. It will then continue an eight-day journey through 37 cities in Greece before being handed over to Japan, where the torch will visit 47 prefectures over 121 days before arriving at the opening ceremony on 24 July. Earlier this week a member of the organising committee’s executive board told Reuters that a delay of one or two years would be the “most feasible” option if the Olympics could not be held this summer. But that was emphatically dismissed by Mori. “It is our basic stance that we press ahead with preparation for a safe and secure Olympics … we are not at all thinking about changing courses or plans.” Meanwhile the revamped Fed Cup finals, which were due to take place in Budapest, have been postponed. It is the second major tennis event to be cancelled this week after Indian Wells on Monday but came as little surprise after the Hungarian government declared a state of emergency, banning all indoor events with more than 100 people attending.

India restricts drug exports due to coronavirus impacts, threatening global drug supply — Citing shortages due to the coronavirus of raw materials sourced from China, India has placed restrictions on the export of thirteen Active Pharmaceutical Ingredients (API) and another 13 generic drugs produced from these ingredients until “further notice.” As India is a major global supplier of generic drugs, there are widespread fears that these export restrictions will lead to pharmaceutical price-hikes and shortages in countries around the world. . Due to hoarding by merchants, as well as actual shortages, India has already experienced steep increases in the prices of several drugs, especially antibiotics made with Penicillin G. “There are already signs that the reduction in supply to India has pushed up prices there considerably,” an Oxford Economics’ economist told BBC last week. India accounts for the manufacture of at least 20 percent of the world’s generic drug supply. The 26 APIs and drugs now under export restrictions account for about 10 percent of India’s pharmaceutical exports. While India is a major source of generic drugs, the country’s drug manufacturers are themselves dependent upon Chinese manufacturers for basic raw materials used in drug production, with some 70 to 80 percent of these coming from China. The current supply disruptions in India are due to weeks-long shutdowns of Chinese drug manufacturing plants because of the coronavirus epidemic. At present it is unclear when normal production will resume in China. A further factor in the Indian shortages is the disruption of shipping within, and from, China. According to Indian spokespersons, if the supply disruptions continue into April, it could seriously threaten the availability of many commonly used generic drugs worldwide. Those that would likely be impacted include: acetaminophen, calpol, crocin and sumo, which are used to alleviate aches and pains; common antibiotics such as tinidazole, metronidazole, chloramphenicol, and neomycin; clindamycin salts, and vitamins B1, B6 and B12; and hormone supplements such as progesterone used in birth control pills. Europe and the USA have become heavily dependent upon the Indian supply of these drugs. African countries also rely upon Indian generic drugs because of their cheaper cost. Due to widespread poverty and inadequate health care infrastructure, Africa would be especially vulnerable to drug shortages and price hikes.

Global Air Traffic Set For Worst Year On Record – Covid-19 has become a significant headache for the global air travel industry, according to a new report from Jefferies. In fact, it is about to become the biggest shock for airlines on record as global air traffic is expected to dive 8.9% this year as the global viral pandemic paralyzes transportation routes across the globe.In its reported cited by Bloomberg, Jefferies said that the latest demand shock to hit the airline industry is the largest drop in data that goes back to 1978, and it even dwarfs the impact seen during the 2001 terrorist attacks and the 2008 financial crisis. “It’s unprecedented,” said Jefferies analyst Sheila Kahyaoglu.We noted last week that more than 200,000 flights across the world had been canceled as the virus crossed into pandemic status. At the same time, retail outlets at airports around the globe reported a significant drop in foot traffic, resulting in a collapse in sales at duty-free shops.In a separate report by Moodie Davitt Report, a travel retail-intelligence service provider, they said this is the “the greatest crisis the travel retail sector has faced, worse than [severe acute respiratory syndrome], the two Gulf wars or various financial crises.” Plunging air traffic has also meant a plunge in jet fuel demand. 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. And to show you how the airline industry has gone bust. Airports across the world are deserted:

Airlines are burning thousands of gallons of fuel flying empty ‘ghost’ planes so they can keep their flight slots during the coronavirus outbreak – Airlines have wasted thousands of gallons of fuel running empty “ghost” flights during the coronavirus outbreak because of European rules saying operators can lose their flight slots if they keep their planes on the ground. Demand for flights has collapsed across the globe amid growing fears about the outbreak.Under Europe’s rules, airlines operating out of the continent must continue to run 80% of their allocated slots or risk losing them to a competitor.This has led to some operators flying empty planes into and out of European countries at huge costs, The Times of London reported. On Thursday, UK Transport Secretary Grant Shapps wrote to Airport Coordination Limited asking for the rules to be suspended during the outbreak to prevent further environmental and economic damage.”I am particularly concerned that, in order to satisfy the 80/20 rule, airlines may be forced to fly aircraft at very low load factors, or even empty, in order to retain their slots,” Shapps wrote.”Such a scenario is not acceptable..” ACL has already suspended the rules for flights to and from Hong Kong and mainland China. However, they remain for all other flights.On Thursday, the UK airline Flybe went into administration, a practice similar to filing for bankruptcy protection, though it said its financial problems existed long before the outbreak. The International Air Transport Association has estimated that the outbreak could wipe out up to $113 billion in airline sales worldwide.

Riksbank Deputy Governor Tests Positive For Coronavirus – Sveriges Riksbank Deputy Governor and Stockholm University economics professor Martin Floden has tested positive for the novel coronavirus, the virus that causes the illness known as Covid-19, according to Omni Ekonomi. Sweden has confirmed 203 cases of the virus since January, though no deaths have been recorded. The country’s public health officials have been widely praised for tracking down vacationers who visited Italy over the recent holiday only to be infected with the virus. Bloomberg reported that Floden tested positive for the virus on Friday. He is feeling well and is working from home, according to the Riksbank’s spokesman Tomas Lundberg. Here’s more from BBG: In addition to the recommendations of the country’s health agency, “the Riksbank has taken further precautionary measures regarding its employees,” the central bank said in its statement. For example, employees who have traveled to the worst-affected areas “must work from home during the two weeks immediately following their return home.” The news comes amid increasing speculation about what measures the central bank may need to take to tackle the impact of the virus. Danske Bank analysts said last week they expect the Riksbank to cut its repo rate by 25 basis points in April, as Swedish workers risk a poor outcome in central wage negotiations amid the fallout from the virus. That easing call was echoed by Capital Economics on Monday. The Riksbank ended half a decade of negative rates in December, despite a slowdown in the Swedish economy. Since then, some policy makers have signaled they’d rather expand an existing bond-purchase program than once again resort to subzero rates, should there be a need for further stimulus. Floden is one of 248 people in Sweden to have been diagnosed with the virus, as of Monday. The central bank’s next monetary policy meeting is set for April 27.

European Stocks Crash Most ‘Since Lehman’, Enter Bear Market (6 graphs) European stock markets just suffered their worst decline since Lehman… Oct 2008 as the crude and Covid chaos rolls around the world… Europe is now down over 22.5% – a bear market – from highs just 3 weeks ago… The selling was absolutely across the board… European banks crashed to their lowest since March 2009… but judging by EU bank credit, there’s more to come… And European credit is crashing… German bonds were aggressively bid all day with two- and five-year yields dropping to -1%, Gilt yields fall below 0% in two- and five-year segments, with BOE’s buyback seeing the institution buy at a sub-zero rate But, Italian yields surged, rising 30bps in 2-year to 10-year segments. Graphs Source: Bloomberg Paging Christine Lagarde!!

Coronavirus Spreads Global Recession Fear –Fears of a financial meltdown at least on the scale of the 2008 crisis intensified Monday as global markets were gripped by panic resulting from the spread of the coronavirus across the globe and the ensuing oil price war launched by Saudi Arabia over the weekend.”The fear today is about a global recession,” said Thomas Hayes, chairman of management firm Great Hill Capital, as markets headed for their worst day since the 2008 crash.As The Washington Post reported Monday morning: “U.S. futures pointed to heavy losses on Wall Street on Monday. Overseas, London’s FTSE 100 fell more than 8 percent to its lowest in three years; Japan’s Nikkei index slumped more than 5 percent and Australia’s benchmark shed more than 7 percent. Oil prices suffered the sharpest plunge since the 1991 Gulf War, while 10-year U.S. bond yields dropped to a record low as investors sought safety.”While some urged caution in interpreting the meaning of daily market fluctuations, analysts said there is reason to fear that a destructive economic crisis is on the horizon. Chris Weston, head of research at the Melbourne-based web trading platform Pepperstone, told The Guardian that “there is genuine panic” in the market, noting that he hasn’t “seen anything like this for years.” Escalating market turbulence and warnings of a worldwide economic fallout came as the human toll of the coronavirus, officially known as COVID-19, continued to grow. In the U.S., the number of recorded cases surpassed 500 across 34 states and deaths rose to 22 as the Trump administration’s lack of preparedness was on full display Sunday morning.

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