We read a lot in the news about the new Wuhan coronavirus and the illness it causes (COVID-19), but some important points often get left out.
[1] COVID-19 is incredibly contagious.
COVID-19 transmits extremely easily from person to person. Interpersonal contact doesn’t need to be very long; a taxi driver can get the virus from a passenger, for example. The virus may be transmissible even before an infected person develops symptoms. It may also be transmissible for a few days after a person seems to be over the virus; it is possible to get positive virus tests, even after symptoms disappear. Some people may have the disease, but never show symptoms.
[2] The virus likely remains active on inanimate surfaces such as paper, plastic, or metal for many days.
There haven’t been tests on the COVID-19 virus per se, but studies on similar viruses suggest that human pathogens may remain infectious for up to eight days. Some viruses that only infect animals can survive for more than 28 days. China is reported to be destroying paper currency from the hardest hit area, because people do not want to accept money which may have viruses on it. Clearly, surfaces in airplanes, trains and buses may also harbor viruses, long after a passenger with the virus has left, unless they have been thoroughly wiped down with disinfectant.
[3] Given Issues [1] and [2], about the only way to avoid spreading COVID-19 seems to be geographic isolation.
With all of today’s travel, geographic isolation doesn’t work very well in practice. People need food and medical supplies. They need to keep basic services such as electricity and garbage collection operating. Suppliers of food and other services need to come and leave the area and that tends to spread COVID-19. Also, the longer a geographic area is isolated, the larger the percentage of the people within the area that is likely to get COVID-19. The problem is that the people need to have contact with others in the area for purposes such as buying food, and that tends to spread the disease.
[4] The real story regarding the number of deaths and illnesses seems to be far worse than the story China is telling its own people and the world.
The real story seems to be that the number of deaths is far greater than the number reported–perhaps 10 times as high as being reported. The number of illnesses is also much higher. At one point, facilities doing cremations in the Wuhan area were reported to be doing four to five times the normal number of cremations. Some of the bodies in the Wuhan area now need to be sent to other areas of China because there is not enough local cremation capacity.
China doesn’t dare tell its people how bad the situation really is, for fear of panic. They want to tell a story of being in control and handling the situation well. The news media in the West repeat the stories that the government-controlled publications of China provide, even though they seem to present a much more favorable situation than really seems to be the case.
[5] Our ability to identify who has the new coronavirus is poor.
While there is a test for the coronavirus, it costs hundreds of dollars to administer. Even with this high cost, the results of the tests aren’t very reliable. The test tends to produce many false negatives. The virus may be present somewhere inside the person being tested, but not in the areas touched by swabs of the throat and nose.
[6] Some people get much more severe symptoms from COVID-19 than others.
Most people, perhaps 80% of people, seem to get a fairly light form of the COVID-19 illness. Groups that seem particularly prone to adverse outcomes include the elderly, smokers, those who are obese, and those with high blood pressure, diabetes, or poor immune systems. Males seem to have worse outcomes than females.
Strangely enough, there is speculation that people with East Asian ancestry (Chinese, Japanese, or Vietnamese) may have a higher risk of adverse outcomes than those of European or African ancestry. One of the things that is targeted by the disease is the ACE2 receptor. The 1000 Genome Project studied expected differences in ACE2 receptors among various groups. Based on this analysis, some researchers (in non-peer-reviewed studies, here and here) predict that those of European or African ancestry will tend to get lighter forms of the disease. These findings are contested in another, non-peer-reviewed study.
Figure 1. Chart from Coronavirus risk for Asians, Africans, Caucasians revealed.
Bolstering the view that East Asians are more susceptible to viruses that target the ACE2 receptor is the fact that SARS, which also tends to target the ACE2 receptor, tended to stay primarily in China, Hong Kong, Taiwan, and Singapore. While there were cases elsewhere, they tended to have few deaths.
Observational data with respect to COVID-19 is needed to determine whether there truly is a difference in the severity of the illness among different populations.
[7] China has been using geographical quarantine to try to hold down the number of COVID-19 cases. The danger with such a quarantine is that once the economy is down, it is very difficult to come back to the pre-quarantine state.
Data shows that China’s economy is not reopening quickly after the extended New Year holiday finished.
Figure 2. China daily passenger flows, relative to Chinese New Year. Amounts are now down more than 80% and have not increased, even as some businesses are theoretically reopening. Chart by ANZ, copied by WSJ Daily Shot Feb. 17, 2020.
Figure 3. China property transactions, before and after Chinese New Year. Chart by Goldman Sachs. Reprinted by WSJ Daily Shot, Feb. 17, 2020.
All businesses will be adversely affected by a lack of sales if they need to continue to pay overhead expenses. Small and medium-sized businesses will be especially adversely affected. Bloomberg reports that if a shutdown lasts for three months, there is a substantial chance that these businesses will run through their savings and fail. Thus, these businesses may be permanently lost if the economy is down for several months.
Also, restarting after a shut-down is more difficult than it might appear. Take, for example, a mother who wants to go back to work. She will likely need:
- Public transportation to be operating, so she has a way to get to work;
- School to be open, so she doesn’t need to worry about her child while she is at work;
- Masks to be available, so that she and her child can comply with requirements to wear them;
- Stores providing necessities such as food to be open, or she may be too hungry to work
If anything is missing, the mother is likely not to go back to work. Required masks seem to be a problem right now, but other pieces could be missing as well.
Businesses, too, need a full range of workers to restart their operations. If the inspector doing the final inspection is not available, the business may not really be able to ship finished products, even if most of the workers are back.
[8] A shutdown of as little as three months is likely to be damaging to the world economy.
Multiple things are likely to go wrong:
(a) Commodity prices are likely to fall steeply, because of low demand from China. Oil prices, in particular, are likely to fall steeply, perhaps to $30 to $35 per barrel. Besides cutbacks in oil demand from China, there is the issue of a general reduction in long distance travel, because of fear of traveling with other passengers with COVID-19.
(b) US businesses, such as Apple, will find their supply chains broken. They won’t know when, and if, they can ship products.
(c) Debt defaults are likely to become more common, especially in China. The longer the slowdown/shutdown lasts, the greater the extent to which debt defaults are likely to spread around the world.
(d) The world economy is likely to be pushed into recession, without an easy way to get out again.
[9] The longer the shutdown lasts, the more likely there is to be a major collapse of the Chinese economy.
In the event of a long-term shutdown, it would seem likely that, at a minimum, a new leader would take over. In fact, there would seem to be a significant chance of major changes within the economy. For example, the provinces of China that are able to restart might attempt to restart, leaving the more damaged areas behind. In such a case, instead of having a single Chinese government to deal with, there might be multiple governmental units to deal with.
Each governmental unit might consist of a few provinces trying to provide services such as they are able, without the benefit of the parts of the economy that are still shut down. Each governmental unit might have its own currency. If this should happen, China will be able to provide far fewer goods and services than it has in the recent past.
[10] Planners everywhere have been guilty of “putting too many eggs in one basket.”
Planners today look for efficiency. For example, placing a large share of the world’s industry in China looks like it is an efficient approach. Unfortunately, we are asking for trouble if the Chinese economy hits a bump in the road. Using just-in-time supply lines looks like a good idea as well, but if a major supplier cannot provide parts for a while, then having inventory on hand would have been a better approach.
If we want systems to be sustainable, they really need a lot of redundancy. Redundant systems are not as efficient, but they are much more likely to be sustainable through difficult times. There is a recent article in Nature that talks about this issue. One of the things it says is,
A system with a single cycle is the most unstable because the deletion of any cycle-node or link breaks the sustaining feedback mechanism.
“A system with a single cycle” is basically similar to “putting all of our eggs in one basket.” “Deletion of any cycle-node or link” is something like China running into coronavirus problems. We probably need a world economy that consists of many nearly separate local economies to be certain of long-term world economy stability. Alternatively, we need a great deal of redundancy built into our systems. For example, we need large inventories to work around the possibility of missing contributions from one country, in the case of a problem such as a major epidemic.
Conclusion
The world economy may become very different, simply because of COVID-19. The new virus doesn’t even need to directly affect the rest of the world very much to create a problem. The United States, Europe, and the rest of the world are very much dependent on the continued operation of China. The world economy has effectively put way too many eggs in one basket, and this basket is now not functioning as expected.
If China is barely producing anything for world markets, the rest of the world will suddenly discover that long supply chains weren’t such a good idea. There will be a big scramble to try to fill in the missing pieces of supply chains, but many goods are likely to be less available. We may discover quickly how much we depend upon China for everything from shoes to automobiles to furniture to electronics. World carbon dioxide emissions are likely to fall dramatically because of China’s problems, but will the accompanying issues be ones that the world economy can tolerate?
The thing that is ironic is that it is possible that the West’s fear of the new coronavirus may be overblown–we really won’t know what the impact will be with respect to people of European or of African descent until we have had a better chance to examine how the virus affects different populations. The next few weeks and months are likely to be quite instructive. For example, how will the Americans and Australians who caught COVID-19 on the cruise ships fare? What will the health outcomes be of non-Asians being brought back from Wuhan to their native countries on special planes?
Oh, oh, according to the article below, I have not read it, caught a summary, rubbing alcohol will be the next to go. May I suggest Vodka? Pure alcohol with multiple purposes and uses, the government could eliminate all taxes as it is now a medical product, increase the GDP, helping the working man/woman, win win as I see it.
https://www.zerohedge.com/markets/never-seen-anything-it-virus-cases-surge-so-will-buying-panic
Excuse me for an hour or so, I need to go and purchase more toilet paper. If that fails, yesterday I purchased bar rags, so with a suitable container and plenty of bleach for the washer, I am covered for less cost than the cost of toilet paper and Greta would pleased as I am saving the planet. My fellow doomers, there is a reason some populations eat with one hand only.
We need Robert to straighten this all out with some quotes and levels from Dante. First where can we sit the idiot from an Asian country that designed this mess, second, is there a suitable place for a certain Swed now that we are solving the global warming problem.
What I really miss as I sit listening to Beegie Adair on Pandora is sitting around a piano bar or in the cities a fire in the lobby of a certain hotel sipping a Glenlivet on the rocks with suitable company. Simple man with simple tastes.
Dennis L.
Countries have figured out that if they don’t have test kits; the don’t have the virus….That is the trump plan for the U.S and soon will be every where else
What this highlights, of course, is that the major cause of deaths from the virus in the advanced countries will be the inability of health services to treat people due to sheer numbers of the seriously ill, lack of equipment and staff – just overwhelmed, but there are degrees even within that.
Italy less than 8000 cases in the north and already there health service saying there near breaking point.
It doesn’t take may cases to “go over the edge.”
A new aspect to the ‘let it rip’ theory, which emerged in the govt. press conference in the UK today: if maximum casualties (not put like that, of course) are taken now, it would be better than stronger repression now only for the virus to rage fiercely in the winter, when health services are even more stressed than in the spring and summer. The thinking is that this will save 20-30% of the deaths among the most vulnerable that would occur in the latter scenario.
Between the Devil and the deep blue sea, really. Either way, I shouldn’t care to be a hospital worker.
https://www.worldometers.info/coronavirus/
Look at Italy numbers; +1797 to 9172, but get this, there are 1187 settled cases in Italy and of those 463 are deceased, which is a 39% fatality rate!!! How could this virus not have mutated into something more deadly?
This virus Is viral amalgam of HIV . Sars. Ebola . Mers . Unical R 0; very hight. Was DID in laboratorio. As First Will go inside all people in world. After in autunno whit flu Will kill billion of Person. Virus remain inside as eppsten bar virus. So Is perfetto virus for some people want kill billion of people. So can stop globale warming. Stop end oil. Can take all land all Gold of world
Perfetto for kill billion of people whitout caos
Let’s see now. Trot out an expert just a little flue nothing to worry about nowt to see here move along. Best we close school for a couple of weeks don’t want the kids giving granny the flue, nothing to see here move along. Couple of weeks later quarantine half the country can’t be to careful don’t want to many people of work with flue at same time.. How long before the sheep wake up.
The good virologist doc out of NY, said it was definitely NOT of bioweapon origin, are you challenging him, or even the money/power/ethnic gang horse he is riding on.. ?!?
/sarc off
Change is fascinating, Gail looks forward very well, the following quote from this week’s Kunstler talking about factories in the Hudson Valley:
“They were originally built with a lot less machine power than we would use today, and a lot more power of men working in groups. We’ve forgotten how effective men can be working together with pretty simple tools. We were too busy devaluing men in recent decades for the sake of a moral crusade to erase “gender” differences. Well, that will be bygone so fast your head will spin.”
He begins this weeks post with a note about the NYT opinion page. Apparently transphobia is the cause of many ills in Britain. Simple conjecture: learning math and science is really, really hard and it is far better to earn a “C” than get passed through learning nothing and getting an “A.” We have focused too much on being agreeable in my opinion, this is going to be a very interesting time.
We are people, I celebrate the loss of not one life and see absolutely nothing of value in collapse, building is a damn hard project and something is far better than nothing. However, it does seem as though Gaia is a bit p…. off.
Dennis L.
https://community.oilprice.com/topic/9936-ccp-holding-back-virus-data-spanish-flu-1918-mutated-came-in-3-waves-lasted-14-months-and-killed-upward-5-world-population/
“CCP holding back virus data . . . . . . Spanish Flu 1918 MUTATED, Came in 3 waves, Lasted 14 months and killed upward 5% World population”
“After the Spanish Flu mutated it became extremely virulent. It subsided and re-emerged in three waves and lasted more than a year. Killed between 50 million to 100 million.”
Vaccines not discovered yet.
(1) Spanish Flu first recorded in March 1918. Very contagious. Deaths resulted.
(2) By July 1918 the flu abated. All was good. All clear.
(3) August 1918 the Second Wave of a MUTATED Spanish Flu appeared and was both contagious and exceedingly deadly.
(4) Third wave , also a mutation, started November 1918. Not as deadly as 2nd wave, but more than the first wave. This continued until Spring 1919. Some reports say still killed until 1920.
Don’t think it can’t happen again ? Better to be prepared.
someone, somewhere on the internets discussed the 1918 Flu remedy in terms of applying boost to bodily ph level acidity.. true/false.. don’t have time to evaluate at the moment though.. there could be some “cheap hack” to Corona as well..
The global economic system that we gave ourselves is a monster. It requires growth all the time. There is no in between, we either grow or die, as simple as that. As long as conventional oil production increased, the system worked okay (with many inequalities but still we grew). We added humans and we made the economy grow. The serious problems started in 2005 when conventional oil production peaked. As a result we had the 2008 debacle. However with QE and low interest rates we were able to resume growth, albeit with those measures. But the papering over could not last forever as the physical reality of conventional peaking in 2005 would never go away. Sooner or later there would be a snowflake that would cause the avalanche, collapsing the world economy. I believe now that COVID-19 might be that snowflake. Mind you even if we had for example abiotic oil, infinite conventional oil, we might not have had all these economic problems but the result would have been us asphalting the world over and adding billions of people and thus bringing about environmental collapse…and not in 100 years, but a few years later than today. The result however, whether from global economic collapse (maybe this year) or environmental collapse (maybe 2040?) the result would have been the same = human extinction…Anyway whether you agree or not, I wish you all here Carpe Diem, now more than ever.
I can share in fb? Beutifil post
Of course np! Thank you btw 🙂
I think as you but cant explaine)
Great post, how true.
I’d love to Carpe Diem, but as I’m self-isolating now it’s a bit tricky! One kiss could be Death…. 🙂
Lollll Thanks Xabier! I just came back here recently to read the comments section…I see the regulars are still here, except one BIG ONE….Where da hell is FE? Did he already crash his car on the side of a mountain? 😉
My son is a school teacher in Brooklyn. He is home for the weekend. First bad cold, then headache and stiff neck, now fever. He first bad cold, now headache and stiff neck and slight fever. 100 miles north of NYC. Time for more vitamin C. Xabier, stay isolated, stay safe. How far from London?
that should read Me first….
The fed will buy all of it thats important if they have to. Watch. Its magic.
When your your own counterparty there is no counterparty risk.
“If the stock market crash isn’t bad enough, the fallout in the US bond markets is perhaps even scarier to contemplate – particularly given a boom in risky borrowing by US oil and gas firms in recent years.
“Deutsche Bank has just issued a note warning there could be a “Minsky moment” for high-yield American bonds…
“The bank’s analysts warn that defaults – companies being unable to repay or refinance their debts – are now inevitable, with around $13bn of debts due for repayment before the end of 2021 from the most heavily-indebted oil and gas firms.
“In a shocking sign of the chaos to come, it says the distress ratio for US oil and gas high yield debt – defined as the proportion of debt trading with a spread of at least 1,000 basis points (in other words, bonds with yields that are more than 1,000 basis points higher than a reference yield such as on a US Treasury bond) – was already 62.3% as of Friday before today’s oil price collapse.
“To put that in context, it says the distress ratio hit 43.9% in March 2016 when oil prices last crashed. In good times, when the oil price peaked in late 2018, it was 4.8%. In other words, well more than half of heavily-indebted US energy companies have borrowing costs that are going through the roof. Gulp.
“In another illustration of how risky the situation is, Standard & Poors says the percentage of oil and gas borrowers with negative outlooks on their credit rating – which gauges their financial strength and is key for borrowing money on reasonable terms – is around 33%, which is well above the long-term average of 19%.
“Central bankers have been worrying about the US high yield bond markets for quite a while now already. This could be the start of something quite dramatic indeed.”
https://www.theguardian.com/business/live/2020/mar/09/markets-plunge-crash-financial-crisis-coronavirus-ftse-italy-oil-price-dow-business-live
Current 10 Year Treasury Rate: 0.74% -18.00 bps
All time low comrades.
I am wondering about all of the debt in China that ultimately comes from US and Euro markets.
Italia have spread BTP . Bund douchland are 220 now. Before was 140. When Will be 500 Will be defoult
Bass seems to be vindicating FE’s ~2018-9 worry in the sense HK’s economy singled out as to be completely devastated. There are other comments and guess-timates put forward, like US should adapt SKorean drive through testing, reaching “peak corona” in one month/summer months, and so on..
Should read adopt the testing..
Also rather ominous is the hint at geopolitical consequences for internal (virus) turmoil in Iran, which could be sort of preparing the msm talking point grounds for strike them when they are weak.. as I tend to evaluate Bass as speaker-charmer for one of the tentacles (be it fresh) of the global money hydra..
I think you are right peat this is just a step down….not the “Big One” the FED is going to buy a lot of stocks…. https://www.zerohedge.com/markets/what-can-fed-do-print-buy-buy-buy-stocks
yawn. wake me when the dow is at 20. that would be as healthy correction
I remember 2009 – went from 14.5 to about 6.5
Only reason it quit falling was TARP and ZIRP
No telling what this bailout is going to look like and I doubt it is going to keep it propped up.
I believe Russia just made their move to knock the dollar out by refusing the production cuts. Saudi can double down like they have but I think they’ll fold soon enough and at that point Russia will come out far stronger than they are now.
This is definitely a power move. Here soon even though oil will be trading in the $20’s (maybe lower) nobody will be driving and using it because they’ll be unemployed and can’t afford it coupled with inflation through the roof.
Gail I’ll say it here first – you called it.
what I don’t understand is how does the market go up just a little bit? Why doesn’t it keep falling? Who would be buying when it is falling this fast? It seems like throwing cash onto a burning fire
We have electronics and computers these days, you see. If they’d had them in 1929, there would never have been a crash and a depression. 🙂
Things over react. Where does one run? There are still honest people in the world, some run companies, one must pick one’s friends carefully.
Governments first job is to preserve their jobs, pensions, etc. They will do whatever necessary, print money comes to mind.
We here at OFW are a very diverse group of people and we manage to be very civil towards each other. Thanks in no small part to Gail we have learned how to post without flame wars, we have learned not to panic; if you are going to die, it does no good, if there is a chance of survival, it does no good.
Dennis L.
“what I don’t understand is how does the market go up just a little bit? Why doesn’t it keep falling? Who would be buying when it is falling this fast?”
PPT = Plunge Protection Team. That who’s buying.
S&P hit limit down at -7% at the open. I don’t know about you folks but I don’t consider our markets stable when they have to electronically prevent them from doing what they want. I think this week we may hear news of the Federal Reserve starting QE again, possibly expanding it to include stocks as well. They’re definitely 100% dropping interest rates when they meet in 10 days, the only question is how much?
QE worked to some extent after the 2008 financial crisis but seriously doubt it will now. QE now would be like tossing currency at spinning propeller blades. We just all need to get back to the business of BAU and stop being afraid of the Corona virus. We need to learn from ants that cross a stream by making a raft using themselves – if we ignore the virus and go about our business it can’t take down the economy, but if we run from the virus the economy will collapse. Let’s get across to the other side of the stream/virus together knowing many won’t make it but on the other side will be a whole economy.
It would be nice but on the other side I see an impoverished society with even deeper class divisions, and a sense of betrayal and deep distrust of governments due to the handling of the pandemic – all pervasive cynicism.
The messaging about the virus has shocked so many people, above all the ‘only the sick and old’ meme. They won’t forget, above all when they have had dead to bury (or probably just getting the ashes much later after cremation).
A large sea of red ink at the financial market.
Will the red ink turn into blood?…
“The New York Federal Reserve said Monday it will increase the amount of money it is offering to banks for their short-term funding needs.
“As part of its continuing efforts to make sure the funding, or repo, markets are working properly, the central bank said it will up the amount it offers in overnight operations from $100 billion to $150 billion through Thursday.”
https://www.cnbc.com/2020/03/09/fed-to-step-up-liquidity-injections-to-guard-against-market-pressure.html?fbclid=IwAR0t4IcFAmKOMnxJ00uqhaVL821n1_1JPy6zyrJpA2yMJOEzgMrIZLkligM
@ CTG – Is it true, most China Export was relaunched in the meantime? You mentioned China Export closed 95 % the day before yesterday!
My 2nd cousin, who lives in Tuscany, just posted a video of all the people in Milan getting on trains leaving town ahead of the lockdown. Presumably, many, untested, may be leaving with the virus to spread at varied destinations. With a shortage of testing kits, incubations and transmissions continue in the dark.
Perfect example of how not to do a regional quarantine.
But the Brits are just as dumb: flights are still reaching London from Milan, no health checks either pre or post-flight – ‘the cabin crew are looking out for people with symptoms’….
I suspect the British government hopes for a quick-burn epidemic, getting back to normal as soon as possible.
But will normal still be there?
Milano in apnea
Milano in apnea = Milano in temporary cessation of breathing. This works only for a very, very short period. It will kill the economy very quickly, if sustained, just like human cessation of breathing.
Our “leaders” must soon realise the precautions are way more dangerous than the virus and turn around forcing people back to work? Hope it is not to late …
“Our “leaders” must soon realise the precautions are way more dangerous than the virus and turn around forcing people back to work? Hope it is not to late …”
That’s what I’ve been suggesting in many posts, but no one else suggested something similar until I saw your post. The big picture is the remedy of shutting down areas of commerce is worse than the virus. My wife started to get angry at me because this is what I was saying, so I stopped talking about it. Humans are for the most part emotional, not logical, so the route of trying to avoid the virus has taken hold, but we need to realize that strategy will fail the world economy in a pandemic, then we’ll all be in a chaotic mess. The only alternative is to buck up and go about the business of BAU before there isn’t one to go back to.
In 1918 during the Spanish flu was likely different because the economy had not grown as big or anywhere near as connected. Now it is a global economy connected to an extent that will not permit a long siesta. People in Wuhan are still stuck in their apartments. “Put out the all clear and stop reacting to the virus before it’s too late and there is nothing left to go back to” is my message, but I don’t hear that from politicians. So down the tubes we go I guess.
https://www.google.com/#spf=1583780577913
Monday, the Dow is down over 2,000 points & oil is at 32.79 after being in the high 20’s yesterday. During the 08 financial crisis oil only got down as far as 36., so we are even lower now.
But the price of oil was lower in early 2016.
Marco, I found this comment from an Italian. I want to ask if it is true because I am in Asia. I know Italy will still be there but what do you think? Thanks.
“Prisoners are rioting because authorities won’t let their relatives visit them, the military got employed, a Neapolitan selfquarantined with his sister but never received tests or medical care thus leading to the death of his sister, the video went viral, also hospitals in the south are slowly but surely starting to get full.
Basically, there won’t be an Italy next week.”
Yes i saw video. Maybe naples not ready for protocol for take ill coronavirus. Honestly i not belive 100 per cent nothing Who arrive from naples. In jail they told was apocalittic immagine. But not explaine. Maybe was die 6 Person in jail maybe 3 . Dont know. Maybe from medicine they stole maybe from guns. Not are info. Jail sistema in Italia Is another old old problema never solved. Are 2 times people can be inside. A lot africana and other country and HIV and contagius. Italia have a lot of skeleton in closet
Thanks… Need to ask. Too many fake news.
Many people left North Italy when quarantine orders came in. This is not good for the southern Italy.. Take care. Stay safe….
I wonder if similar calamities will take place in Singapore (where I live) these coming months. I sure hope not…
The sorry state of affairs now overwhelming the planet seems an invitation to sit down for a bit of reflection. Where will you be going? Where can you go? What can you do that will make a difference?
Is it really going to be ‘lights out’ for us now?…
Singapore has warmth and humidity working for it. Its number of cases per 1 million population is far below So. Korea, Italy and Iran. It is more in line with Norway and Sweden. We will see what happens.
“With U.S. stock futures set to plunge at the open, investors will be watching for key market circuit breakers to kick in and limit or halt the market altogether.
“Futures contracts hit “limit down” on Sunday evening after CME-traded stock index futures contracts sank 5%, halting trading below that level and preventing futures from falling any further.”
https://www.cnbc.com/2020/03/09/sp-500-futures-are-frozen-after-tanking-5percent-heres-what-happens-when-circuit-breakers-kick-in.html
Wait when virus arrive south Italia. After Will be caos. They have not hospital. 6 Person die in jail.
Won’t take long. Thousands left north Italy before lockdown.
Italia Will go out only whit another currency…Need some years. I prepper for 3 years of absolutly darkness
Fresh water will be an important need. I hope you have thought of that as well.
Be glad for US old clunky ways, as your home well pumps are usually single phase, which is ~3x less expensive to furnish with renewables than EU/RoW three phase systems. Also in next step down you are also more endowed with favorable land per capita ratio, so animals can pump it up.. Obviously %%(sub)urban depop / slavery / feudum comeback phase won’t be pretty transitional period anywhere.
Ladies and Gentlemen, it was a pleasure…
This was one of the few corners of rationality and long-term thinking present on the web, but now it looks like this will be the Black Swan that brings down the whole fragile edifice.
Thank you for giving us a space, Gail.
All the best and good luck,
VFF
Just do the maths. This is already going expontial in italy. Best wishes to all.
FIGHT LIKE APES !!!
You are welcome. Epidemics have brought a lot of economies down in the past. If an economy is already near the edge and also has illusions about its ability to save itself from the epidemic, it seems to encourage geographical areas to undertake the equivalent of apnea (as in sleep apnea, with a cessation of breathing). This cannot be a solution. The patient dies from the treatment.
Collapse may very well arrive because of people’s response to the virus. Part of the problem is that the world is already near collapse. Epidemics are often part of collapses. It is just that we have forgotten to think about them. Gail told 2’weeks ago. This Is history
I think this is more about manufactued fear and hysteria by the press. They have done a good job of stoking the flames. I’m pretty sure Chris Martenson has sold a few more subscriptions to Peak Prosperity Dot com.
This guy tries to use some needed common sense and just shows some of the behind the scenes shenanigans that can take place.
https://www.globalresearch.ca/ncov-2019-coronavirus-time-line/5705776
I am afraid this article includes a lot of wishful thinking. Our world economy is too close to the edge for this to happen, in my opinion.
Our finite world….or our world Is finished?))
Our Finished World… 😉
LOL!
Gold Doomer Medal for you! Perhaps the most downbeat comment yet. 🙂
“Australia’s economy will record its first recession since 1991 as the hit from China’s virus-induced slowdown is amplified by slumping confidence and domestic disruptions from the outbreak intensifying Down Under, according to Bloomberg Economics’s James McIntyre.”
https://time.com/5799353/australia-recession-coronavirus/
“BNZ has become the first major bank to predict a recession, forecasting that [New Zealand’s] economy will shrink in the first half of the year.”
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12315108
““Central banks across emerging markets are, on the one hand, facing huge sell-offs in their currencies; and on the other hand, a slowdown in growth,” Cedric Chehab, head of country risk and global strategy at Fitch Solutions, told CNBC’s “Street Signs Asia.”
““So what do they do? Do they cut interest rates to stimulate growth or do they raise interest rates to support their currencies? I think a lot of central banks are going to be squeezed by this policy dilemma now,” he added.”
https://www.cnbc.com/2020/03/09/emerging-market-central-banks-face-dilemma-as-oil-plunges-analyst.html
“South African Rand hits 40-year low after triple whammy…”
https://www.thesouthafrican.com/news/finance/zar-exchange-rate-dollar-to-rand-value-monday-9-march/
Maybe with low Rand and low oil price, it can sort of afford imported oil.
“Japan’s biggest contraction [7.1%] in more than five years adds to escalating concerns among policymakers about the length of a likely recession in the world’s third-largest economy as the impact of the coronavirus and a plunge in oil prices causes markets to slide and the yen to gain.”
https://www.japantimes.co.jp/news/2020/03/09/business/economy-business/japan-gdp-recession/#.XmYEN6j7TIU
“Fifty days after confirmation of the first novel coronavirus case in South Korea, the economy is in a tailspin with major industries facing severe setbacks amid production disruptions, falling consumption and growing uncertainties.”
http://www.koreaherald.com/view.php?ud=20200309000581
“China’s exports contracted sharply in the first two months of the year, and imports declined, as the health crisis triggered by the coronavirus outbreak caused massive disruptions to business operations, global supply chains and economic activity.”
https://www.reuters.com/article/china-economy-trade/rpt-update-4-china-jan-feb-exports-tumble-imports-down-as-coronavirus-batters-trade-and-business-idUSL4N2B100T
I hadn’t realized that import/export data would be available for China this soon, because I thought that data would be delayed. It is interesting that exports are “only” down by 17.2% and imports are down by 4%. I suppose if they China is not producing as much, it needs to import relatively more of goods like food, masks, and disinfecting solutions.
I understand that some industries, such as steel mills and aluminum mills, have continued to produce in China, because it is difficult to shut these down for short periods, and production is far from Wuhan. These industries would contribute to continued electricity (and coal) use in China, and would add to exports. China is mostly not making finished products with iron or steel, however, so the production is adding to inventories and forcing the world prices of these commodities down. Transportation is particularly down, especially affecting the demand for oil.
Panic!!!!!
yes… that is the appropriate word for today…
Marco, I have a cold. It is just a cold (fingers crossed). It is taking some effort to remain calm. IF I get a fever then PANIC!!!!
Shutting down businesses because a few employees test positive is a strategy that ultimate collapses the economy, as far as I can see. Sort of like putting a tourniquet on your arm, because you have a scratch on it.
However, many places cannot function with 30% of the workforce at the peak of the epidemic off sick for a month at a time, so even ordering companies to stay open won’t really be effective either.
In some sectors customers will be totally absent even if the venue or shop is manned and open.
True. If there are a lot of small businesses, say farms, that don’t need a lot of tending a some times of the year, many of them can more or less continue in operation. Or other family members who are well can take over some of the duties. A few stores might also be able to stay open as well. A cobbler might make fewer shoes, and a seamstress might make fewer dresses, but without a lot of debt, these operations could get back to working quickly.
With our big businesses with specialized workers, it is almost impossible to do without 30% of workers. At best, in a manufacturing facility, a company can make fewer of a particular product by operating fewer lines of production. Overhead costs would make the production unprofitable, however.
The -7.1% GDP change for Japan was in the October to December quarter, after raising the sales tax, before all of the coronavirus problems started.
“If the new coronavirus Covid-19 turns into a global pandemic, economists at Rabobank foresee an economic recession in large parts of the world, including the Netherlands, Germany, Japan, Italy, and the United States.
“”This economic crisis could become even worse if it turned into a financial crisis, for example when the number of bankruptcies increase sharply worldwide,” the Rabobank economists said, the Telegraaf reports.”
https://nltimes.nl/2020/03/09/coronavirus-trigger-global-recession-rabobank
“Germany announced measures to boost its sputtering economy in the face of the fast-spreading COVID-19 on Monday… Berlin… pledged to draw up proposals on offering liquidity support for companies hardest hit by the impact of the outbreak.”
https://www.channelnewsasia.com/news/world/coronavirus-germany-economic-measures-covid-19-crisis-12517624
“Italy is studying a state guarantee scheme to support banks offering debt moratoriums to households and companies, a member of the government said on Monday, as a coronavirus outbreak hits the economy….
“Italy’s banking lobby has asked European authorities to ease rules on problem loans for at least six months.”
https://uk.investing.com/news/economy/italys-government-studying-state-guarantee-to-support-bank-debt-moratoriums-to-households-2067933
Italia Is in default. We not can print Money we can not do debit we cant decide because of Europe we have 2.4 trillion debit. We are in default from 2000
Stealth default for .it only so far..
The (W) world is in sort of stealth over saturation since ~1970s and RoW coming to it NOW. Lets calm, relax, exhale.. it will take a while longer..
As the news links suggest, now the mandarins would prescribe cash-flow treatment, debt jubilees (partial for now) for both biz and individuals (households) etc. I guess we have at least months of quasi working civilization ahead of us.
Of course, there is a little question of how much the state guarantee is really worth.
They are catching on a bit:
“The yield on the benchmark 10-year Treasury — which dropped below 1% for the first time earlier this week — dropped to a record low of 0.74%. The 30-year Treasury yield also slid to 1.34%, another record low.
“”The bond market is scaring the raccoons out of the air ducts like crazy right now,” Neil Wilson, chief market analyst for Markets.com, said in a morning note.”
https://markets.businessinsider.com/news/stocks/this-not-drill-stocks-bond-yields-tumble-coronavirus-economic-fears-2020-3-1028971397
“The world is in a period of “true turmoil,” with financial markets and economies in crisis while the new coronavirus continues to spread rapidly, oil guru Daniel Yergin told CNBC.”
https://www.cnbc.com/2020/03/09/fear-is-now-pervasive-oil-expert-dan-yergin-says-amid-market-rout.html
“…most mortgages will eventually have to be rewritten as lease agreements so that people can stay in their homes during the very hard times that are coming… But the mortgage market is just nickel-and-dime stuff compared to the global derivatives market…
“It is the precipitous drop in the price of crude oil that most threatens the financial Ponzi scheme.”
https://www.fxstreet.com/analysis/deflation-and-the-pandemic-202003082251
“Central Banks Have Lost Firepower, Kaufman Says… Recent rate cut won’t address a crisis, former Salomon Brothers economist says… the central bank is now going to be hard-pressed to respond appropriately to economic and market crises…”
https://www.wsj.com/articles/central-banks-have-lost-firepower-kaufman-sayscentral-banks-have-lost-firepower-kaufman-says-11583275190
“Global markets are plunging after the implosion of an alliance between OPEC and Russia caused the worst one-day crash in crude prices in nearly 30 years, fueling panic triggered by the escalation of the coronavirus epidemic.”
https://edition.cnn.com/2020/03/08/investing/stock-dow-futures-coronavirus/index.html
“As the coronavirus outbreak rattles the Dow Jones, nervy investors are drawing parallels to the stock market crash that accompanied the 2008 financial crisis.
“But one Wall Street bear warns that this equities bubble mirrors an even more terrifying downturn: the Great Depression.”
https://www.ccn.com/this-is-1929-hedge-fund-bear-warns-of-great-depression-style-stock-market-crash/
Min difference is we aren’t on the gold standard any more, so we can have soaring stock markets in parallel with tanking economies
I well remember when oil prices abruptly rose, and there was panic. Now oil prices have abruptly fallen, and again there is panic. It seems the entire world financial system is structured around the need to avoid panic: not by creating value, not by providing meaningful employment, but rather by pretending that we are in control. And that illusion is, or rather was, all that stood between us and panic.
And now we see that the Great and Powerful Oz is merely an illusionist behind the curtain. Not before time, in my opinion. Perhaps now we shall abandon our false values, and go back to true values: Prudentia, Fortitudo, Temperantia, Iustitia; Fides, Spes, Caritas. Four from Classical Antiquity; three from the Christian West. The bedrock of civilisation for two and a half thousand years.
Control is a delusion, and our so-called leader are being controlled by their collective delusional thinking.
The last week as we knew the world
As a Pantheist living in a Christian country, I feel somewhat divided about posting this. But given that we are one week from the Ides of March, perhaps it is appropriate:
“In the time of any common Plague or Sickness:
O ALMIGHTY God, who in thy wrath didst send a plague upon thine own people in the wilderness, for their obstinate rebellion against Moses and Aaron; and also, in the time of King David, didst slay with the plague of Pestilence threescore and ten thousand, and yet remembering thy mercy didst save the rest; Have pity upon us miserable sinners, who now are visited with great sickness and mortality; that like as thou didst then accept of an atonement, and didst command the destroying Angel to cease from punishing, so it may now please thee to withdraw from us this plague and grievous sickness; through Jesus Christ our Lord. Amen.”
(from The Anglican Book of Common Prayer, 1662)
“you guys remember when we had to break the glass and pull out the emergency bourbon during the ‘08 campaign that day when the whole world fell apart? The market wasn’t as scared as it is right now.”
Goolsbee (Obama’s economic adviser)
Italia alcool Is finished too. As Mask.
The central banks are starting to lose control as everything is breaking down… Repo…stock markets…oil… commodities… yields…
The CEO JP Morgan, Jamie Dimon had a heart attack after extreme levels of stress.
Don’t forget runaway climate change.
Could be his lucky ticket for retiring on seemingly legit purpose..
Well, I understand there are very special characters mixing extreme competitiveness, power lust, greed etc. But for what purpose in the end, he could have left yrs ago, or perhaps pressed to stay in order to keep his loot..
How many hours before we hear about the first derivative default?
“South Korean retail investors, known for their appetite for esoteric financial products, could face massive losses on securities linked to oil futures.
“At least five of the top 10 brokerages in Korea sold derivatives-linked securities in April 2019, when Brent crude futures were above $70 per barrel, according to their websites.
“Buyers for the complex products, which are based on two to three underlying indexes such as Hong Kong Stock Exchange Hang Seng China Enterprise Index (HSCEI), Brent, or West Texas Intermediate crude, could lose part of their principal if oil prices close below $35 per barrel today.”
https://www.bloomberg.com/news/articles/2020-03-09/korean-moms-and-pops-to-face-big-losses-in-oil-linked-products
Australia eyes the nuclear power:
https://www.smh.com.au/politics/nsw/barilaro-s-nuclear-push-bitterly-dividing-coalition-20200308-p547zm.html
Auto Sales and German Industrial numbers were collapsing.
The Central Banks were out of ammunition.
The Fed knows they will be blamed for the collapse.
The CCP knows they will be beaten to death when the mandate is lost.
What to do what to do.
Release a virus that collapses the global economy.
Blame the virus.
Genius.
Arguably, dying of a virus is less bad than dying of international war. Epidemics often go with wage disparity, poor nutrition and crowding.
The same situation is repeated: After the previous parliamentary elections in Slovakia in 2016, no party that formed the new government hurried to get the ministry of health. The same happens now, after the last parliamentary elections held in February 2020. This ministry is the Black Peter card that no political party wants to have.
https://www.tasr.sk/tasr-clanok/TASR:20200308TBA01587
I’m not sure the ministry should be compared to Zwarte Piet; more likely it is this card:
https://images-na.ssl-images-amazon.com/images/I/81Izq2dDCNL._AC_SY679_.jpg
(From the Rider Waite deck, of course)
goodnight from the hot zone…
tomorrow should be quite entertaining…
Funny how Greta Thunberg wanted us to stop travelling and then we did. It looks very suspicious from where I’m standing. Which in turn is helping Gail Tverberg fulfil her ambition of overseeing collapse. GT & GT – Greta Thunberg and Gail Tverberg, the two scandalous Scandinavians, the two horsewomen of the apocalypse. Hubble, bubble, toil and trouble. Little baby Jesus certainly won’t be pleased with Ms Tverberg now. 🙁
Greta must be so pleased…
and only 200+ COVID-19 cases in Sweden…
I hope she’s not worried anymore about her future…
Sweden is only testing people who have been skiing in Italy. For a while that keeps numbers down 🙂
please don’t shoot the messenger.
Gail and Greta are not horsewomen. Don’t get them mixed up with Annie Oakley (shown below) or with certain members of the British aristocracy.
https://angelvancouver.files.wordpress.com/2013/02/annie-oakley-shooting-bareback.jpg
But Gail and Greta do talk a lot about the terrible mess the world’s in. They talk about that subject until their throats get sore. And so they can fairly be called two hoarse women of the apocalypse.
Still trying to shoot the messenger?
Just to prove that us humans are really crazy, let’s drop the oil price really low so that we can use up all the cheap oil quicker.
Do we have any adults left running the world?? It appears not.
It sort of goes with my experience over a decade ago with those in power. They are just people like the rest of us fumbling around for answers, often with less information than those that can spend the time researching.
You can lead or research but there is not time for both, plus the leaders don’t have a hope of spending enough time really knowing something they need to, before making a tough decision. Therefore they rely on advice, often from people with a bias or agenda.
We are in deep deep trouble.
“Just to prove that us humans are really crazy, let’s drop the oil price really low so that we can use up all the cheap oil quicker.”
no worry on this one…
the global demand destruction will ensure that we burn perhaps only half as much in 2020 as in 2019…
massive global unemployment means much less wages earned to afford oil products at any price…
good news!
“Do we have any adults left running the world?”No one is running the world. No one is in control.
Perhaps, but key events are evidently nudged and steered to preferred outcome of stake holders, which is basically almost full control or at least high degree of control within fluid situation..
$29.71…!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
$29.71…!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
WTI below $30………………….
Woooooooooooooooooohaaaaaaaaaaaaaaaaaaan!!!!!!!
$27.95 now…
let me double check…
yes, tonight’s low is $27.95…
$27.90…
but now it has roared back above $28!
When oil hit the low 40’s a couple days ago, Gail wrote something to the effect of wait until it’s in the 20’s. Well, here we are already – good gawd ya all!
Lets wait for sings of temporary gyration or forming price plateau development..
If it stays midterm ~ $25 I’ll eat my proverbial hat, currently NYSE pre-market “retail tools” leveraged oil shorts are up ~80% from Friday and nearing 500% since JAN.
Several people discussed here the “triangle of doom” for oil price in recent months (and for years earlier), so finally here are the goodies delivered.
But as always kind of Pyrrhic victory for traders and gamblers, what you gonna buy with these winnings.. unobtainable or decreasing quality products, land – do you have skillz for that?
A little too early in the cycle of civilizational decline: they can’t take their winnings and buy lots of slave labour just yet.
Although something like that seems to be going on in Greece, with the speculative plunder of assets at bargain prices.
Move to Libya? Regular slave markets there I believe….
https://money.cnn.com/data/premarket/
Dow pre-market now -1255
minus 4.8%…
does the Dow have a 5% limit down, like the S&P?
I think it was just the S&P futures market with a limit of -5%.
Nikkei down 6%…
I found a WSJ article on how the automatic breaks in the market work:
Stock Trading Halted After Selling Triggers Circuit Breaker
It sounds to me as if all stock trading is halted, not just S&P 500 shares, because the prior cutoff was based on the drop in the Dow.
Interesting interview…
https://www.youtube.com/watch?v=dcJDpV-igjs
Cheers,
-GBV
this is war!
and usually there is a winning side and a losing side…
in this war, humans are greatly outnumbered… 😉
lol
The economy is what loses in the war.
“… … and indeed, today’s move is the biggest one-day drop in Brent on record.”
Sunday March 8, 2020…
this week, we shall see many more “biggest on record”…
Buy the dip.
Dennis L.
Here we go.
Smoke them if you got them.
I don’t think they’ll be able to pull this thing up no matter how much pumping and rate cuts they throw at it.
We are going to have to ride to the bottom to find the true price – if we live that long and that is a big IF.
Financial glue is coming off rapidly. The virus is not lethal (unlike Ebola). We will die not by virus but by starvation or riots and anarchy.
There is no other ending.
Anyone remember the alcohol swab? The small piece of alcohol-soaked paper or rag? I do think a majority (or its raw materials) are made in China. Basically with this alcohol swab, hospitals cannot function and infection may be rampant. Would anyone think that this small piece of paper will be a “killer”? Pepple only think about the big items like ventilator, O2 equipment, etc.. ya…ya… for the want of nail, the country is lost
Sorry. Spelling. Without this swab, not “with this swb”
I found alcohol, to make my own swabs, is in short supply at the grocery store I usually shop at. I bought some when I was shopping on Saturday.
What about denatured alcohol at hardware store?
It is trite, but toilet paper was gone at Sam’s this AM, Rochester, MN store; MN has no reported corona cases of which I am aware. Water was going out the door, empty spaces. Paper towels were very low, I purchased what are essentially bar rags, in the washer now, some through dryer, when all the lint is collected they may well be similar to paper towels.
At the end of March Mayo has their annual dental review which I enjoy greatly. Dentists come from all over the nation and sometimes the world, wondering if I should go. This damn virus is a PIA. There is lunch at eight tops, an evening get together in the lobby of one of the clinic buildings, wonderful, a large social setting, not easy decisions. There are so many areas in life where mingling with people is such a pleasurable experience, social isolation is for the birds.
I did not see alcohol at Sam’s, might be gone, maybe someone on OFW caused a panic run.
Purchased some garden seeds, at the going price, gold/oz is cheap and that is not an exaggeration. Most are hybrids which means reclaiming seeds is all but impossible.
Completing Tim Morgan’s “Life after Growth.” He submits the number of years man has been hunter gather compared to modern life – as I recall on the 24 hour day farming comes in about 8:00PM, industrialization sometime after 11:00PM. Groan, back to chipping flint to make an arrow point.
Dennis L.
Dennis, good news! For our life times there will be no end of nickels and quarters that can be made into fine arrow points. For reference see Earth Abides (1949) by George Stewart.
Chlorine bleach works as well. Messier to use. It can be enhanced by running a DC current through it.
This personal protective equipment is not going to protect these medical personal. Hello you need to shave if you are going to wear a respirator around things that might kill you, not that those respirators are going to protect.