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?
How about a nice patient controlled morphine drip for the serious cases? Just saying…
Remember i said their is a plan b or bau lite well this is it according to my memory they will be running the financial system on a lot less 50 million barrels a day with a lot less resources there needs to be a cull in our numbers and a shift in our lifestyles
It is hard to see this end well.
#10 just came in wti $33.29 a barrel.
On Zerohedge I see, Market Massacre: Oil Crashes 30%, VIX Explodes As S&P Craters Limit Down
“… S&P future has hit the limit down band of -5%…”
it might be possible that this week we could see 5 days of this…
Dow futures -1,000 pts and we aren’t even close to the opening bell.
I bet they announce a rate cut by Wednesday and go public that they’ll bailout the airlines if necessary.
The fall will stall and then resume. The chains and the people are broke with a pandemic slamming the doors shut. The exits are going to be few and far in between.
WTI now down to $30.82, down over $10.00!!! Dow premarket -1,000 and counting… It’s hard to keep up with how fast things are spiraling out of control.
quite exciting…
it might be hard to get to sleep tonight…
getting close to dropping into the $20s…
I’m watching with eager anticipation…
There goes oil, down 30%. Say goodbye to shale everybody!
I see the big drop in prices as well. The WSJ has an article out on the issue. Saudis Instigate Oil-Price Clash with Russia Oil prices hit lowest levels since 2016 after oil giant Aramco said it plans to cut prices
I think that the situation with the depression in the 1930s is exactly the right analogy to what we are seeing today. That situation was not ultimately resolved until World War II and the ramping up of oil supplies. We don’t have the possibility of ramping up cheap oil supplies this time around, however.
What’s especially interesting to me is how many different, large problems are all occurring simultaneously. North Korea just launched a missile, the Fed dropping interest rates, the stock market crashing, OPEC dissolving and oil prices crashing, supply chains collapsing, and the Coronavirus! Supposedly there are global dimming theories as well and how we’re about to cook ourselves. You can’t make this stuff up, clearly everything is interconnected. I don’t see how we have much longer left, collapse has to happen this year.
Exactly!
“I don’t see how we have much longer left, collapse has to happen this year.”
around the first of January, I predicted 2020 would be a year with about the same BAU as 2019…
oh, well… life is short…
What are you talking about! I am buying the Dip! Cheer up Sammy!
a golden day, now night is falling…
the Doom looms thick in the cool air…
a Horseman is riding beyond the horizon…
he rides towards us all…
Horseman of apocalips. They are 4)
Fair Daffodils, we weep to see
You haste away so soon;
As yet the early-rising sun
Has not attain’d his noon.
Stay, stay,
Until the hasting day
Has run
But to the even-song;
And, having pray’d together, we
Will go with you along.
We have short time to stay, as you,
We have as short a spring;
As quick a growth to meet decay,
As you, or anything.
We die
As your hours do, and dry
Away,
Like to the summer’s rain;
Or as the pearls of morning’s dew,
Ne’er to be found again.
(Robert Herrick, 1591 to 1674, To Daffodils)
How is this decline in oil prices different from the one in 2016? It looks like we are near the same levels.
This time, we have coronavirus breaking supply lines and pushing world demand lower and lower. There will likely be no way to get oil prices back up to the necessary level for companies doing oil extraction. Some of the supply line breakdowns are permanent. Once employees are lost, small businesses fail, and financial systems fail, it will be virtually impossible to get the total economy back up to where it was before. China is likely to shrink back greatly in its contribution to the world economy. Other countries will need to make up for China’s deficits.
Prices of commodities besides oil are likely to suffer as well. Certainly natural gas and coal prices will tend to fall as well. Phosphate rocks used to make fertilizer have recently been too low in price to extract. Any drop in phosphate prices will impact the ability to produce fertilizer profitably.Without fertilizer, world food production is likely to shrink.
In a way, we have had an economic “pump” working for us. People could borrow money, and use this money to buy resources. These resources, including energy resources, could make goods and services of greater value to consumers that the cost of resources plus the cost of the human human labor that went into making them. This pump is no longer working, because resources are becoming more depleted. One way this problem appears is through inadequate profits for commodity producers; another way this problem appears is through a squeeze on the wages, especially of the lower-paid workers.
These low wages, plus other pressures, have led many to many of the lower-paid people not eating a very good diet. This poor diet leads to health problems, such as diabetes. Viruses, such as the current coronavirus, find it easier to attack a weakened population. The large number of elderly people also add to the vulnerability of the current economy to a new coronavirus.
Without the economic pump working, our use of debt and of the sale of shares of stock for business enterprises is no longer working. The debt bubble that is holding up the economy is threatening to deflate. The situation doesn’t look good. Once the commodity prices are down, there is no way to get them back up. The problem is lack of affordability of finished goods and services by buyers. This is a “demand” problem. Back in 2016, we didn’t have the coronavirus. More debt still worked to pump up the economy. We have kept the economy going, with an increasing amount of debt at lower and lower interest rates, but that path has pretty much run out in the last few years. We have run out of options for fixing our current mess.
great summary!
Thanks
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the count down to Monday March 9, 2020…
https://www.worldometers.info/coronavirus/
another break out in Singapore… plus 12 cases, now at 150…
boastful Sweden plus 42! now at 203…
epidemic numbers now building up in Spain, France and Germany…
Italy passes South Korea for 2nd most cases…
Italy 366 deaths compared to 622 recovered… so out of 988 concluded cases, the death rate is 37%…
37% if that’s your preferred math method…
Thanks Gail. Your posts are incredible.
Glad you like them!
the countdown to Monday March 9, 2020…
https://www.worldometers.info/coronavirus/
another breakout in Singapore… plus 12 cases, now at 150…
impenetrable Sweden plus 42! now at 203…
epidemic numbers now building up in Spain, France and Germany…
Italy passes South Korea for 2nd most cases…
Italy 366 deaths compared to 622 recovered… so out of 988 concluded cases, the death rate is 37%…
37% if that’s your preferred math method…
“As the coronavirus outbreak evolves, we answer some key questions
“As the new coronavirus spreads, we are updating this FAQ with the latest on the race to understand the virus and stop the growing global health crisis.”
https://www.sciencenews.org/article/coronavirus-questions-covid19-symptoms-deaths-spread?utm_source=Editors_Picks&utm_medium=email&utm_campaign=editorspicks030820
“… and stop the growing global health crisis.”
no chance…
No one dares explain our real problem.
This article does say,
The fact it says this, and elsewhere talks about containing the disease seems bizarre to me. If the disease’s R nought were 1.25 or some other low number, there might be a chance. But with an R naught perhaps as high as 6.0, and certainly at least 2.5, screening efforts get nowhere. The R naught stays well above 1.0. There always has to be contact with others for necessities of life. By the time there is “enough” containment, the economy is permanently closed down and can never recover.
Containment may be impossible, but I think the concept of slowing the virus down so it doesn’t overwhelm our health care systems (and possibly increases the amount of time in which a vaccine and/or effective antivirals can be developed and distributed, though I don’t have much faith in either of those outcomes being realized) is simple enough to grasp.
-GBV
“When will it end?
It’s a tough question for experts to answer, and right now, it’s unclear. It’s looking less likely that control efforts will stop the epidemic and cause the virus responsible for COVID-19 to disappear, as SARS did, some scientists say. That means that the virus could begin circulating permanently in humans, like influenza or the common cold. It’s unknown at this point if the virus might become seasonal like the flu.”
Will be endemic . People Will be infected many times and After die.this virus broken kidney central system and arterius
The high costs of living in the city flats and apartments force the citizens of Prague, Czech Republic to seek asylum in the weekend houses on the outskirts:
https://www.idnes.cz/praha/zpravy/bydleni-ekonomie-chaty-chatareni-stehovani.A200303_200124_praha-zpravy_jum?zdroj=vybava_lidovky
Subscribers only. If it’s not legal living there how can they? Do they have another official address where they don’t live? Seems like ok circumstances except maybe in the coldest winter (or if old and weak).
This is the reality: the official picture is that you can not live there (no municipal waste collection, no proper sewage system etc.), but if the state has no solution for you, why should it punish you? When you are poor, you can not pay the fines and penalties.
There are various things in the Eastern Europe that are not in line with the official laws of the states and the EU. Everybody sees it, but, officially, no problem or illegality exists.
I suppose here the government would tear down the illegal buildings to ensure noone lives there.
The costs of tearing down the illegal buildings are another costs that need to be paid by the state, not by the poor. The state needs money for other things, like healthcare, social security etc.
It’s more like residue from the “terrible old communist times” when even working class could afford summer houses small or bigger and relax there properly in summer time, weekends. sometimes even on weekday afternoons.. Now the situation completely reversed, people kicked out from high rent apartments (used to be manageable rate to cheap under gov scheme). Well, they wanted “color revolution” did not they..
Actually in fairness this trend of summer dwellings for ~lower classes originated in many countries way before WWII (even some precursors prior WWI).. be it on the outskirts of cities or more distant places closer to nature on marginal land plots.
This is similar to the situation in California. The state (or city…not for sure) was sued for arresting people for sleeping in public. A lower court ruled the state could not arrest these people as there was no/unaffordable housing available. The state appealed to the Supreme Court and they refused to hear the case thereby the lower court ruling stands. This is undoubtedly why nothing is done anymore about those sleeping rough.
By that reasoning, if nearby property-owners beat them up, they could argue in court that they had no other choice, since the police refused to get rid of the bums.
Well, this is more tricky. There are cases in central Slovakia, when the people are forced to buy the neighbouring old house in the depopulating countriside areas, so that no poor Roma people expelled from the towns buy it and live there, often molesting their neighbours with noise, dirt, unhygienic behaviour while turning that old house a complete ruin.
News I heard through a friend: Blue Cross/Blue Shield execs in Chicago spent the week wringing their hands and running the numbers, and decided on Friday that Coronavirus testing had to be covered at no cost for its members, not even a co-pay. It truly is the apocalypse.
Also, there will eventually come cheaper testing kits, wasn’t it just on the news like new ~30min ones available soon for massproduction. Well, actually, perhaps not in global JITs mal-performing, fractured world of the future..
Somehow, if all of the beds in hospitals are filled, someone will have to be paying for this. Most citizens won’t have funds for the big copays on these either. There will be a problem with not enough health care providers, because the number of health care providers doesn’t really increase. In fact, it may decrease, because some of them are out sick. Lots of interesting difficulties.
Are hospital beds allocated on a first come, first served basis, or what? Should younger people who can eventually get back to work be given priority?
Are 10 000 Person in quarantena. Out of Number . Are people Who was in city infected. Or had dangerous meeting. And yes are a lot of nurse in quarantena. 240 nurse only in hospital of my region. I think they mistooke some protocol. And yes Doctor told Will do triage. They Will save younger ill and let die older because young have more chance to live
Italia now show to be very dilettant . In hospital in politics. And this Is best part of Italy. When virus Will arrive in Rome and Napoli we Will see people die on street because they are poor city ovepopilation whit problem even in normale days
366 die.age are up 80 years 60 die……0 to 49 years only 1 die
yes, most efforts should be to save the younger ones…
let us who are 60+ years old move out…
I think this is what will happen this week or maybe stretch into next week
1. Milan stock exchange will not open or after a serious skid, they will announce the temporary closure.
2. Europe will institute national borders again
3. Soft quarantine will be issued for all of Europe (go out only when necessary)
4. The rest of Italy will get worse. There are many videos showing people leaving train stations when the lockdown was announced (we never learn from Wuhan) and these people will spread it out of northern Italy (from Wuhan to Hubei and the whole world)
5. Stock markets in Europe will drop a lot. ECB cannot do anything because they are already printing money. now. Short selling will be banned.
6. Asset classes across the board in US will drop dramatically. Italian lockdown was never factored in at all. Those who say “it is just a flu, bro” will have nothing much to say and the stock market has nothing optimistic anymore (vaccine? rate cut?). Bond will sell off, margin calls will happen.
7. Machine trading will be severely tested because they have not experienced a prolonged down days. Maybe, the programs are not designed for many down days
8. Soft quarantine will be instituted in USA.
9. PMIs will crash (especially Europe)
10. Oil will drop dramatically.
11. Shelves will be bare for some items because supply is not available
Let see how many will turn out true
You may very well be right on quite a few of these things. Things are happening rapidly.
https://www.forbes.com/sites/sarahhansen/2020/03/06/3-record-breaking-numbers-that-sum-up-the-economy-right-now/#58e410ac5172
“On Monday, the OECD warned that the outbreak has the potential to cut global economic growth in half if it continues to worsen. And despite a stellar February jobs report indicating that U.S. companies added many more jobs than expected last month prior to the beginning of the outbreak, economists still can’t quantify the impact of the virus so far.”
That first sentence – potential to cut growth by 1/2. I’ve seen this a few times now and it seems to the MSM’s idea to quell the masses regarding greater economic concerns surrounding this virus. So in other words they don’t see a recession coming, they see not as much growth by as much as half – how soft and quaint. Anyone with even a slightly working noggin can see this virus reaction better be temporary and I mean very short lived or things will devolve fast into chaos. The world is now just too interlinked, too in need of just in time parts, service, food etc. (and near the end of the oil age requiring CB assistance) to just take a time out for several weeks or months, then jolt back into coherence once the all clear has been raised. The economic machine has a high rate of flow like the Amazon river, and once its gone down too far it could start back up but at a trickle, while the message would be for people to remain patient while they try to restock shelves. Patience? I’ve seen how people start to get just during a power outage for 3 days! Imagine no food on the shelves for a month – then you begin to see where this situation could quickly devolve into.
“… the outbreak has the potential to cut global economic growth in half if it continues to worsen.”
the more accurate wording would be “the potential to cut global economic production in half”…
and “since it obviously will continue to worsen”…
I was thinking exactly the same thing.
BAU-wise, the bad news is that a few of our Leonardo sticks are now missing.
But the good news is we’ve found a roll of gum tape.
It will be interesting to see if the dome holds up.
alas, we lack any metaphorical “duct tape”…
at this point in time, the infamous days of March 8-9, 2020, I don’t see any way there are enough sticks left to still call it a dome by the end of the year…
water, food, gasoline, maybe part-time work…
my one essential prescription…
some first aid/disinfectant supplies…
we can hope, can’t we?
no?
oh, and it would be great to still have electricity and the internet…
fingers crossed!
no, you are quite wrong…
things will be worse than you predict… 😉
lol! gOTTA LAUGH WHILE i CAN.
Perhaps further out than a week, we could see health insurance companies declaring bankruptcy!
That would be a game changer.
Chaos soon? Blackout? I am prepper from 2010 but now i think Will be realy defoult. My friend bit Chaos soon
Riots in jail. Libanon defoult. 133 die in One day. Street empty. Soccer stopper. No One turist. Driver not want came in Italia. 2500 Person in quarantena only my small region.
Your writing style reminds me of Rorschach from “Watchmen”!
Italian English, the language of poetry!
Marco, I’m wishing you and all your neighbors the good fortune to survive and get through this tough tough time in one piece.
Marco, good fortune to you also.
‘Ara vos prec, per aquella valor
que vos guida al som de l’escalina,
sovenha vos a temps de ma dolor’
(Arnaut Daniel, in the true language of love)
“Chaos soon? Blackout? I am prepper from 2010 but now i think Will be realy defoult. My friend bit Chaos soon”
Let’s hope not but could be, Marco. Italy seems now to be ground zero for this virus.
https://www.worldometers.info/coronavirus/
Italy +1492 to 7375 & fatalities +133 to 366. That’s a lot for one day!
US +93 to 528
The US is bound to hit numbers like Italy in a week or so – that should be interesting. I want to see how that gets spun. By the way, I went shopping for groceries and the store was calm. No rushing around (yet). So I stocked up on my favorite kind of tuna – 30 cans. I figure if the power goes out and there’s no bread or mayo, I’ll just eat it out of the can. Got to have something besides freeze dried.
10 000 in auto quarantene. They not work they was in Dangerous places. Or Just back from Milano or similar
With so many in quarantine, it no longer makes sense. You somehow need the economy to be operating, using the people who are well enough to make it work.
“With so many in quarantine, it no longer makes sense. You somehow need the economy to be operating, using the people who are well enough to make it work.”
I agree completely, but at this point the economic ramifications are apparently not sufficient to overcome the emotion of fear. Later when people are trying to pay bills, get food, etc. they’ll start going back to BAU. I figure this is our ‘initiation’ period, then comes the ‘get tough’ period followed by the ‘sad’ period followed by the ‘resigned to live with it’ period.
We still not acceoted this
If One driver of camion from Slovenia or Germania came i Italia One time..After must do 15 days in quarantena when back in Germania. So can work One day and 14 at home. Not sustenible . So no One want came in Italia
Exactly. It is not possible to find people who want to drive trucks for fly planes to the affected areas.
It would be better to find people who have already had to virus and recovered to drive the vehicles. They hopefully have less chance of coming down with it again.
Chris Martenson doing his part to sell subscriptions via “fear and hysteria”. His latest article “As Bachman Turner Overdrive sings: “You Ain’t Seen Nothin’ Yet”.
Don’t get me wrong, I like Chris’ work and the topics he covers topics I like and agree with but he is convinced the data he has seen means this is the “BIG ONE”. I OTOH see this as nothing more than fear and hysteria.
I also see this as manufactured chaos to blow up the global eCONomy because those who created the problems need a scapegoat. And yes I even suspect this so-called virus was let loose on purpose.
Anyone thinking they can control chaos they have started is delusional at best. There are too many interconnected chain reactions to possibly know the outcome.
The one almost certainty is that if what happened before this year was BAU, then what lies ahead will have a different shape and form.
At present all indicators for those paying attention point down. There is a very good chance Chris Martenson is correct in this being the big one, but nothing about the future is ever certain, except death and taxes of course, plus human stupidity…
Rod is that your “gut” feeling? If this virus is manufactured then it could mutate into something much worse. Governments are all hiding information from its people even in the u.s
I think in autunno virus Will change more strong and all are positive they Will die. For example i am positive eppsten bar virus. All world Will be positive to corona
Well… Maybe the sooner it happens the sooner we can salvage the economy.
“I OTOH see this as nothing more than fear and hysteria.”
https://www.youtube.com/watch?v=pWdd6_ZxX8c&feature=emb_title
Cheers,
-GBV
” I OTOH see this as nothing more than fear and hysteria.”
okay, people have different opinions…
but…
the “fear and hysteria” began in China…
do you think the fear and hysteria were caused by something no worse than flu?
my point is that, whether unintentional or not, whether malicious or accidental, the fear and hysteria are really here…
and here only because the triggger is something much worse than flu…
USA flu this season death rate less than 0.01%
COVID-19 death rate measured now at 3.4%
I think fear is a reasonable response to a virus with a death rate that is probably more than 10% if a person is 60+ years old…
Chris is selling the story that you can take care of yourself, while all kinds of terrible things are happening to your neighbors.
He misses the point that this virus is likely to come back around multiple times, and outsmarting it each time is extremely unlikely. He also misses the point that shutting down the economy because of coronavirus is likely to put an end to our current civilization, including food production, electricity, fresh water, oil, most international trade, and the financial system. If we can somehow store up three months food and water for ourselves and our family, and stay away from the coronavirus, we are likely to come back to a new world that no longer provides the basics of life. We need to continue to provide food and fresh water and everything else we require for ourselves.
If there were a way we could just live with the virus, and those who were physically able to work could work, we would have a better chance of making our way through the problem. We can live without the people who die from the virus. In fact, it helps bring our resources per capita problem down. But we cannot live without the economy that gives use food, fresh water, and other things we require for our daily existence.
“We can live without the people who die from the virus.”
true… and on the “bright side”, the virus will remove many of the economic burdens of the over 60 population…
hey, wait a minute, I’m over 60… 😉
I’m afraid I am in the over 60 group as well.
“He also misses the point that shutting down the economy because of coronavirus is likely to put an end to our current civilization, including food production, electricity, fresh water, oil, most international trade, and the financial system.”
Yes, because doing nothing and allowing the virus to propagate freely won’t do anything to shut down the economy… 😐
Sarcasm aside, it’s unfair to suggest he “misses the point” of the impact of shutting down the economy. If you take a moment to watch ANY of Martenson’s videos over the last few weeks, he frequently includes a slide entitled “The SARS-COV-2 Balancing Act”, which illustrates the dynamic link between:
1. Stopping the pandemic / the need to get R0 below 1.0
2. Keeping the economy going
3. Keeping the hospitals working / keeping the infection level below that which would overwhelm hospitals
Perhaps the point YOU are missing, Gail, is that there may be NO WAY where “we could just live with the virus, and those who were physically able to work could work, we would have a better chance of making our way through the problem.”
At the very least, your choice of words is poor – this isn’t a problem, it’s a predicament. There’s no good choice that resolves the situation – anything solution we pursue is basically a sh*t sandwich, and one way or another we have to take a big, nasty bite.
If you have something (other than opinion – see video clip above) that proves society would be so much better off with allowing viruses and other diseases to spread unchecked, I’m all ears.
-GBV
Tim Garrett in contrast to all supply chain doom
“A prediction: Whatever happens this year with the #COVID-19 and the global #GDP, the dent in global energy consumption and CO2 emissions will be small. Past production of fossil infrastructure is still here to power civilization, even if this year’s new production slows.”
Tim Garrett is a Professor of Atmospheric Science. He is paid to prove that climate change is a big problem. He cannot even think about COVID-19 being a problem.
I think that is a bit limited view of his work.
“7.1 ± 0.1 milliwatts of continuous power consumption has been required to sustain the historically accumulated global production associated with every inflation-adjusted 2005 dollar in every year statistics have been available since 1970.”
What he says is that civilisation must grow, same as most here.
Apparentely he predicts further growth (perhaps after a down year) and not collapse. Yet.
He gets what he advocates. Reduction in fossil fuel consumption? Why is he not happy?
Agree on your response to Gail. Further…
Dr. Tim Garrett produced some ground breaking papers viewing the global economy as a thermodynamic system. The economists who reviewed the papers dismissed those papers saying a physicist should stay out of economics. Sounds familiar…..
I don’t think Dr. Garrett was commenting so much on Covid-19, as much as he is talking about the likelihood that, from a planetary perspective, our energy consuming, CO2 exhaling global thermodynamic system will persist despite the impact of this virus.
Gail should find quite a lot in common with Dr. Garrett’s work if she is not already familiar with it. Here is a good summary of this Dr. Garretts’ thinking on economics
https://collapseofindustrialcivilization.com/2014/03/27/the-biophysics-of-civilization-money-energy-and-the-inevitability-of-collapse/
Here is an entry at Dr. Garrett’s blog.
http://nephologue.blogspot.com/2018/08/the-global-economy-heat-engines-and.html
See The Thermodynamics of Civilization on this web page listing presentations by Dr. Richard Nolthenius. It explores Dr. Garrett’s work in depth. http://www.cabrillo.edu/~rnolthenius/astro7/A7PowerIndex.html
In a couple of twitter exchanges I have suggested to Dr. Garrett that the depletion of fossil fuels might interrupt the growth of civilization in the near future. My understanding of his responses to my questions are that he thinks that the infrastructure we have built with fossil fuels and the momentum (my paraphrase) that it creates, and the new technologies we will create and deploy to mitigate the effects of depletion and open up other resources, make it more likely that we will find ways to continue to grow, at least in the near future.
My thought is that the fossil fuel stocks are outside of this global human thermodynamic system (aka superorganism per Nate Hagens). And that once the aggregate net flows of energy from such stocks into the human thermodynamic system begin to decline, so will that system/organism. And this will happen sooner than later.
Dr. Garrett seems to think the decline/collapse is likely to happen later. He is way smarter than I am, but I am thinking he might be wrong on this point.
“viewing the global economy as a thermodynamic system”
a little like claiming all fish are wet. Truism.
I have corresponded with Dr. Garrett. I agree that some of his work is sort of OK. But it only tells part of the story. As I recall, he doesn’t see the limits on fossil fuel extraction. He indirectly assumes the standard view of, “Of course, prices will rise high enough to extract all of the coal under the North Sea, as well as all of the other fossil fuels we are aware of.”
“Dr. Garrett seems to think the decline/collapse is likely to happen later. He is way smarter than I am, but I am thinking he might be wrong on this point.”
I agree…
though to be fair, I don’t know when he gave his thoughts on COVID-19 that in 2020 “the dent in global energy consumption will be small.”
if he’s up to speed on a level with these OFW discussions, he might realize by now that the global supply chain crisis is going to put a much bigger dent in 2020 economic activity…
even Monday March 9, 2020 may see quite a “dent”…
” I don’t know when he gave his thoughts”Feb 26th.
Guy McPherson and Global dimming too
so as a scientist (retired from UAT) Guy should recognize an experimental opportunity has been created.
I join to those supporting Tim Garrett’s work. Maybe its opinion on this epidemic shock is just based on a BAU-way of thinking and he has not study thoroughly the resilience (or lack of it?) of the global economic system but his papers on civilization as an emergent thermodynamic system do really deserve a read. The main limitation of his model, I think, is that it is a global model and thus does not resolve por different regions and sectors within the economy/world. On the other hand, he presents a link between energy consumption and accumulated wealth which can be checked with updated data and disproved if it needs to. As a another advantage, the mathematics involved are not too hard and in any case one can grasp the general reasoning and dynamics without replicating calculations. If one has objections on the climate change part of some of its papers just forget about it, it does not invalidate the rest.
Of course one may come up with a better model or set of assumptions but Garrett’s work is an oasis in the wastelands of economic growth-related literature.
“The world’s factory has been shuttered, supply chains have been broken, flights have been grounded and tourism decimated. That’s the real-world consequence of the coronavirus and the epidemic has yet to peak outside of China…
“As markets crashed, central banks stepped forward to say they were ready to support growth. The Federal Reserve cut rates by 0.5 percentage points, its first emergency cut since the financial crisis in 2008.
“Whether central banks have the firepower after more than 700 interest rate cuts and trillions in bond-buying after the financial crisis is another question.”
https://www.aljazeera.com/programmes/countingthecost/2020/03/save-world-coronavirus-recession-200307101053339.html
“Global central bankers enter a new week under fresh pressure to outline the next steps in their battle to address the impact of the coronavirus outbreak.”
https://www.bloomberg.com/news/articles/2020-03-08/central-banks-search-for-answers-to-virus-impact-eco-week
Why can’t they just ‘step-up’ and say they are ready to support humanity?
Because they are there to prop up the Money Game Players ….CBs are NOT the Salvation Army, by no means
https://m.youtube.com/watch?v=CeWjEYhk7Xo
That’s what I VANT
Apparently, China still has coronavirus problems that they are not telling the world about as well. The Epoch Times says Amid Virus Outbreak, China Suddenly Cancels Flights and Train Schedules in Major Cities.
If a person reads the article, there was a major cutoff issued, and then rescinded, about 24 hours later, during this past weekend. There seems to be a coronavirus outbreak in Shenzhen and Guangzhou. The cutoff had to do with fear of importing coronavirus cases into Beijing and other major cities, either by rail or air. The affected cities are in the south of China, near Hong Kong.
Another article at the Epoch Times says that some businesses in the north of China are reluctant to reopen because of a lack of disinfectant and an inadequate supply of masks for employees.
“There seems to be a coronavirus outbreak in Shenzhen and Guangzhou. The cutoff had to do with fear of importing coronavirus cases into Beijing and other major cities, either by rail or air. The affected cities are in the south of China, near Hong Kong.”
both cities are in Guangdong province… Guangzhou is the capital of the province of Guangdong in the south of China and that province is the biggest manufacturing area for Chinese exports…
This might be a rather large problem, I expect. There were stories in the article about people walking along and falling (dead/passed out) on the sidewalk, the way that they did in Wuhan.
“The $100 Trillion Bond Market’s Coronavirus Mayhem in 13 Charts.”
https://www.bloomberg.com/opinion/articles/2020-03-07/-100-trillion-bond-market-s-coronavirus-mayhem-in-15-charts
“UAE stock markets plummeted on Sunday, particularly as oil prices nose dived over the weekend with virus-related economic concerns worsening.
“The Dubai Financial Market (DFM) index dropped 7.5 per cent…”
https://www.google.com/amp/s/gulfnews.com/amp/business/markets/uae-stock-markets-hit-as-coronavirus-sinks-crude-oil-prices-1.70235142
It would be good if Fast Eddie could just pop by and say “hi”. It is only 45 days since Wuhan was locked down and during that time period, what happened (and the news flow) is probably more than what happened in the whole of 2019.
The next two weeks seems like the predicament that we have been talking about is coming true. There is no reason that it will not be. Don’t shoot the messenger. It is the truth.
Let us review
1. Liebig’s Law of Minimum is just the same as “The strongest link in the chain is its weakest link”
2. Liebig’s Law applies to everyone and everything. From a personal level (without nails, you cannot build that book shelf), company level (we don’t have parts for that small hand tool), industry level (short of masks) and country level (short of doctors)
3. There are just too many black swans
a. From many sources, Iran’s official states that by 20th March, 40% of Tehran will be infected. https://www.aa.com.tr/en/latest-on-coronavirus-outbreak/40-of-tehran-population-to-contract-covid-19-expert/1757628
b. Saudi Arabia is in a price war for oil. This is extremely bad.
c. Italy has placed Milan on lockdown. We have seen lockdowns happen in China, Korea and not Milan. There is no reason at all why other countries will be exempted.
d. Supply chain is still broken with China not exporting. Liebig’s Law of Minimum applies. Just one small and inexpensive missing part will stop the entire chain. Supplies are still not coming in. There are many articles about this on the internet.
e. The Fed rate cut did not work. Treasury yields are going down to zero. 10Y is benchmark for many derivatives. There are just too many financial stuff attached to 10Y yield. “Experts” don’t know about this because there are just too many of them. Which “expert” can give you a clear answer why the repo is now more oversubscribed than the first incident in Sept 2019?
f. Treasuries, as far as I know cannot be negative. It is like negative mass (my weight is negative 200lbs). It cannot exist. It will blow up many financial instruments and pension funds.
g. Demand for food and household goods were pulled forward abruptly as people panic buy. Items that are suppose to last 4 weeks before replenishment from China comes in is gone in 1 week. Empty shelves does not inspire confidence.
h. The virus is causing serious disruption in everything – travel, tourism, supply chain, lockdown, etc
4. There is a misconception that things will only go bad if it is like “falling 40%”. No, in this current environment, a drop of 5% can be disastrous – leverage, debts, etc. Shipping, freight, commodities are falling. You can even say this is super-duper hyper deflation, happening at light speed.
5. No country is prepared. See this link about healthcare in USA
https://threadreaderapp.com/thread/1236095180459003909.html
From news on the internet, you can check out that Italy’s healthcare system is already overwhelmed. It is like another Wuhan. There are thousands waiting in Korea for hospital beds.
We do have prior examples – Italy, China, Korea – no countries is safe and no country is ready. It will happen. No amount of delaying can postpone the inevitable. It will only make it worse (i.e. suppressing information can only work for a short time but it will blow up other things like China supressing information but causing the supply chain to blow up)
6. Streets and airports have much lower traffic and people stop buying things. Very bad for the economy.
If countries lockdown, the economy will suffer badly. If the border is open, virus will explode higher. It is a “damned if I do and damned if I don’t” situation. There is no middle way. Either you do it voluntarily or you will be forced to do it (like Italy is being forced to lockdown northern Italy).
** Wuhan was locked down on 23 Jan, 2 days before Chinese New Year. What we are seeing in Italy is like Wuhan on 23 Jan. What we see in USA, Germany, UK, Canada is like Wuhan on 15 Jan. What we see in South America is like Wuhan on 5 Jan.
During SARS, people are afraid to work. They will call in and say sick. Some doctors are not even working. Taking sick leave or even just failing to turn up for work was common. Many shops were closed. Banks were understaffed. Communication was slow. Not many people have internet in 2003. There were no smartphones and cell phone calls are expensive. Unlike in the olden days, communication is now very fast. WhatsApp allows instant communication.
If there is a panic in New York, people all over the world will know within minutes. If the virus infected too many people and people are scared to work, then what happen to those working in banks, hospitals, supermarkets, power station, cellphone service providers? Will they shutdown? What will happen if New York has no power and communication because either people are scared to work or may be dead?
Like the simplistic calculation (item #5) on the hospital beds in USA. It is just a linear assumption that only this is the problem. By 05 May, we will not have hospital beds. It is true if you just view it from one perspective but on a macro level, “something” else may just screw this up. The problem that I see is that the “something” is really numerous and all of them are serious or real.
Take care my fellow OFW.
+++
Thanks for the marathon post.
CTG, the thing that galls me is no one I talk to has the slightest clue about the knock on effects the reaction to this virus will have on the world economy. They just say, “Yeah, but we have to do this to be as safe as possible.” Ok, sure, but like your lengthy list of knock on effects is having this early in the explosion of this virus spreading, we are on a bad road that will get much, much worse. I don’t think people have any kind of clue as to where this is leading. Are humans really that focused on ‘now’ they can’t see a little farther out?
There are only a handful of people who are “aware” in this world and ALL of them will be here at Gail’s website. You need to have the perseverance to look for answers to the questions that is bugging you and eventually you will find Gail’s website. If you are working minimum wage or in some countries where you need to work real hard, then you don’t have the time to do research on internet and thus, you will not be able to find Gail’s website. If you are so rich, you don’t even think about this.
If you are “aware” a long time ago like a 13 years ago when oil is $147, you will meet people who will say “since the price of petrol/gasoline is so high, I will just cycle and scrimp on other expenses”. They will never see it that oil is the lifeblood of modern civilization.
This is no difference then what is happening to you now. In the end, you just keep quiet.
Maybe you are right, I have gotten in so many arguments with family members. Just had one recently where my brother said you know nothing about business and finance. I wanted to reply that no one does we are in uncharted waters of manipulating markets. One could easily argue that Jerome Powell knows nothing based on highs muddled responses.
But I must keep quiet I suppose. Most p people are looking for this to blow over and use it as a buying opportunity.
Treasuries, as far as I know cannot be negative. It is like negative mass (my weight is negative 200lbs). It cannot exist. It will blow up many financial instruments and pension funds.
The verdict is still out on negative mass.
A unifying theory of dark energy and dark matter: Negative masses and matter creation within a modified ΛCDM framework
Does this mean treasuries can be negative too?
Let us wait for Robert Firth to see what he says about negative mass. By the way, my age reduced. I am now younger. I don’t grow older but younger… 😉
Negative mass (carry some in your pocket and you can float). Let’s go back to Newton’s Principia, which has two flavours of mass: inertial and gravitational. Inertial mass keeps a body at rest or in uniform motion, so the cue ball remains where it is until you hit it with the cue, and the baseball keeps flying towards you until you catch it in the mitt. Newton’s First Law.
Gravitational mass is what creates the force of gravity, so the Earth attracts the apple, and the apple equally attracts the Earth. Of course, the apple moves a lot, and the Earth moves a very, very little, but the attraction is symmetric. (As it must be: the Law of Conservation of Momentum requires it)
Are they the same? Physics cannot answer that question, because there is a free parameter in the equations: the gravitational constant. The Royal Society could decree tomorrow that the gravitational mass of an object was exactly half its inertial mass; we would just multiply the gravitational constant by 4, and physics would roll on unchanged.
The interesting question is, are they in direct proportion? If so, all objects fall with the same acceleration; if not, they don’t. Galileo did not prove the former by dropping things from the Leaning Tower of Pisa; science too has its urban legends. But the Eotvos experiments did prove them so, with a very high degree of precision. Baron Loránd Eötvös de Vásárosnamény (1848 to 1919) spent many years on this work, and it was exemplary.
Einstein asserted that inertial and gravitational mass were not just proportionate, but the same; his Principle of Equivalence, which he claimed proven by one of his famous “thought experiments”, and as usual the experiment will not work. (I will not bore you with my simple proof of this)
Can mass be negative? Let’s suppose a negative mass is orbiting the Earth. It is repelled by our gravity, and so flies away? Not so: if a mass is negative, then when you try to push it away, it will move towards you (Newton’s Second Law). So there could be lots of negative mass satellites, and from down here we could not tell the difference; their orbital motion would be exactly the same.
How about negative energy? Surprisingly, that has been observed in the laboratory, as the Casimir Effect. Place two conducting plates very very close to each other, and a mysterious force seems to pull them together. The explanation provided by quantum field theory (thank you, Professor Dirac, my former mentor) is that the energy in the space between the plates is less than that in the space outside them, and this difference creates the force. Now, if the energy of free space is zero, then the energy between the plates must be negative. But the premise does not hold, because free space indeed has non zero energy. So the issue remains moot.
Enough for one evening; time for a glass of cognac.
Beutifil post. Lombardia Is near to full hospital. Very near to close hospital. They told Will be triage. They can decide Who Better save
Saudi Arabia wants to sell the oil at low prices. It will cause a lot of problem in the market.
Why Saudi Arabia Is on war for oil? They have oil
War for “selling” oil. Consumers are unwilling to buy end products which require oil, such as vacation trips. Maybe more people will vacation in Italy, if the oil price is lower. Or maybe not!
Thanks for the fine comment. The situation is indeed terribly frightening. We are very close to things falling apart, no matter what we do!
CTG,
great work, thank you.
I’m from Germany and all MSM play down the problem of Coronavirus.
We here in Germany will be hit hard, finance, health care system and car industry specially.
As you said, I also miss FE comments. He was right on everything. I needed some years to accept the consequences.
Often I shut down the pc because his thoughts hurt me a lot.But then I got it and I cannot change the world and the facts , it is like it is. But I know the causes, I’m aware of most things that happen.
A good feeling.
And I wish every OFW members all the best.
It would be good if Fast Eddie could just pop by and say “hi”.
Some of us oldies still pop in from time to time. This is my first post in a couple of years. Back in 2017, we all hoped we could get to 2020 relatively unscathed, and by some miracle, we did. It’s been only two months into 2020 though, and all hell’s breaking loose!
Ain’t limits a bitch?
Now, it appears to be time to face the Muzak.
welcome back psile…. we have a fewe more lurking here…. I know they are reading.
How are you pal? Yes, been lurking. Things had been sort of quiet in the world of collapse these past few years, so it seemed pointless to keep posting. But they sure as sheet have picked up lately! It’s like there’s almost too much doom happening. And it’s still only Q1.
Very nice to see you both, CTG and Psile.
Governments and central banks are either going to have to subsidise huge swathes of the global economy as they come grinding to a halt over the next few months or see the financial system implode under the weight of cascading defaults.
But can they get money to the people and businesses that really need it quickly enough? I’m not convinced they can.
money is tokenised energy.
printing energy tokens isn’t going to substitute for energy itself, which is what is necessary to keep the system in motion
the factories stop working because the workers aren’t in them to make them run, same with cruise ships and aircraft. Those activities will slow or stop.
i dont see what moneyprinting will do to change that, other than to subsidise wages for people who would be otherwise employed there.
But if you pay people for not working, that must lead to destabilisation and hyperinflation.
They’re going to sure as hell try.
The important thing for them is to keep the economy functioning and essential services, like health, running. Everything else is disposable, including the sick, the poor, and the sh*t out of luck.
We’ll see if they can pull it off, since now they have to contend with, and contain, the fallout from:
1) Plunging stock markets
2) Deflating energy and commodity prices
3) Coronavirus
4) Contracting Chinese industrial production
A lot of important stuff just isn’t being made in the factories of northern China, because of lockdown. Which means shortages are due soon.
Can BAU survive, for a bit longer? Please…
I’m not even halfway through my bucket list!
Nice to reconnect. Expect everything and everyone that is deemed expendable to be sacrificed at the altar of BAU, however much longer it lasts.
In the meantime, we’ll be a bit like Roy Batty:
https://images.app.goo.gl/27EBV93AhWBxKwHz6
Norman, I agree, basically.
Financial hand-outs can do nothing to offset the supply shocks and will only offer demand a very limited boost within whatever parameters the diminished supply of goods and services allows.
Debasing currency in this way does indeed risk causing hyperinflation and all manner of unpredictable ruptures within the financial system. We just have to hope that it buys us some time. ¯\_(ツ)_/¯
No kidding! I need to get a post written, but am overwhelmed by the things I could say. What to pick out?
Lebanon defoult
Poor Lebanon. And now they have a coronavirus outbreak to deal with on top.
“Lebanon said on Saturday it would default on its Eurobond debt for the first time and seek out restructuring agreements amid a spiralling financial crisis that has affected foreign currency reserves.”
https://www.google.com/amp/s/amp.theguardian.com/world/2020/mar/07/lebanon-to-default-on-debt-for-first-time-amid-financial-crisis
Pretty smart of Lebanon to time it during the dramatic rise in cases of this virus.
Is there a wider message here aka “Eurobond debt” vehicle only, so far.. ?
De ist WAR! Это война
Eto voyna
https://finance.yahoo.com/news/putin-dumps-mbs-start-war-172746296.html
For over three years, President Vladimir Putin had kept Russia inside the OPEC+ coalition, allying with Saudi Arabia and the other members of the Organization of Petroleum Exporting Countries to curb oil production and support prices. On top of helping Russia’s treasury – energy exports are the largest source of state revenue – the alliance brought foreign policy gains, creating a bond with Saudi Arabia’s new leader, Crown Prince Mohammed bin Salman.
But the OPEC+ deal also aided America’s shale industry and Russia was increasingly angry with the Trump administration’s willingness to employ energy as a political and economic tool. It was especially irked by the U.S.’s use of sanctions to prevent the completion of a pipeline linking Siberia’s gas fields with Germany, known as Nord Stream 2. The White House has also targeted the Venezuelan business of Russia’s state-oil producer Rosneft.“The Kremlin has decided to sacrifice OPEC+ to stop U.S. shale producers and punish the U.S. for messing with Nord Stream 2,” said Alexander Dynkin, president of the Institute of World Economy and International Relations in Moscow, a state-run think tank. “Of course, to upset Saudi Arabia could be a risky thing, but this is Russia’s strategy at the moment – flexible geometry of interests.”
Rosneft is delighted with the breakup. It can now move to boost its market share, said spokesman Mikhail Leontiev.
“If you always give in to partners, you are no longer partners. It’s called something else,” he told Bloomberg. “Let’s see how American shale exploration feels under these conditions.”
And you thought it was ALL about Physics! HA
All long term economics comes down to physics -usually driven by energy availability costs, shorter term economics comes down to market perspectives and associated valuation manipulations – right or wrong.
https://www.worldometers.info/coronavirus/
“1,247 new cases and 36 new deaths in Italy
Percentage of deaths by age group:
90+ years old: 6% of deaths
80 – 89 years old: 42% of deaths
70 – 79 years old: 35% of deaths
60 – 69 years old: 16% of deaths
[that’s 99% of the total in Italy]
– Among the 822 closed cases, 589 (72%) have recovered, 233 (28%) have died
Nicola Zingaretti, leader of Italy’s Democratic Party, tested positive to coronavirus”
how about that 28% death rate?
also, 567 serious/critical cases in Italy…
10x more than any other country besides China…
though Iran either can’t or won’t report their serious/critical cases…
probably incapable…
Yes, and the first ![Mega Quarantine]! after China comes to the West now, the .it govs mandated just over night. The problem is there were many thousands of cretYns travelling to N Italy for ski trips from all EU in recent two weeks despite the known situation, likely spreading it all over as we speak..
WOH you forget: the EU is totally committed to the free movement of people. Including people with communicable diseases. Pandemics were a predictable consequence of globalism, and so here we are.
I find the EU’s total dedication to the noble cause of personal Liberty immensely inspiring.
Let the heavens fall, the people must move!
Uncharitably, I’m somewhat looking forward to news of a large and very aggressive cluster in Brussels. ……..
At this stage it’s still all about (in) direct flights, monitoring the national borders and perhaps checking temperature at best, effectively very porous situation remaining. In pre EU (surely pre EEC) times there would be hard core old style quarantines even among friendlies in place already..
But the reality of today’s MNCs and JITs have completely eaten into borders, so cross-European shutdown is feared and or practically impossible (counter productive)..
Hence the three pillar balancing act to keep everything (IC) running as presented by Marthenson.
There is video footage available of the “midnight run” as people are trying to dodge the imposed quarantine rules, e.g. people depicted as running to railway stations etc., presumably not all of them just Italians trying to escape into the “freezone” of the rest of Italy, but also incl. some foreign tourists..
The elderly father of a friend -a native Lombard – is now stuck in the quarantine zne in his little apartment.
A week ago he was saying it was ‘all exaggerated’ – I wonder quite how he is feeling now…..
Good research, Covid! https://www.worldometers.info/coronavirus/ Even on the official numbers site of closed cases shows a 6% fatality rate, which is higher than the official WHO rate of 3.4% (adjusted higher from 2%), but we need to keep in mind that even that 6% may be low because China has likely cooked the books by their narrow ‘Definition’ of who has the virus, so places like Italy are a better indicator. I think it’s likely this virus will end up with a higher fatality rate than most in power want to acknowledge, because of the widespread fear it could initiate.
Chrome Mags, that is my interpretation as well. SARS was reported to have a CFR of around ‘only’ 3% when it was spreading. At the end of that epidemic the true number of ~10% was revealed in medical journals etc. The media had forgotten about it by then, but now drags up the SARS number to calm down everyone by using whatever lowest estimate they can get their hands on.
It is not strange at all that no-one, not health authorities, nor media, nor politicians use the current CFR of closed cases, which will go up in China (they still have 5,264 serious or critical cases and ‘only’ 20,493 active cases). I would think that more than 6% of the serious and critical wont make it.
It is very scary when the official figures paint a bad picture, and all the media and authorities want people to believe something ‘other’ than the official numbers. They also don’t want people to believe the WHO’s 3.4%, because that is too high for the public.
I’m still finding these types of comments from some supposedly smart people ….. “Corona virus is nowhere near as deadly as even regular influenza”.
The deliberate misinformation, or naivety out there is amazing..
Lockdown coming to a town or city near you soon.
Gail, I’ve also noticed an acceleration in the ‘bad’ financial news coming from all over the place, and people with money really looking past all the hubris in trying to protect their assets. I see an acceleration of the downside in markets happening no matter what central banks do. Are you seeing or sensing similar??
“Chrome Mags, that is my interpretation as well. SARS was reported to have a CFR of around ‘only’ 3% when it was spreading. At the end of that epidemic the true number of ~10% was revealed in medical journals etc.”
Interesting Hide-away – I didn’t know that about the Sars fatality percentages before and after, but that makes sense as stats are often tweaked as propaganda to control the message. When hurricane Maria hit Puerto Rico, the fatality count touted by the White House was 16 and the message was that in comparison to a real disaster like Katrina, the situation had been handled quite well. But the reality was established later at 3,000 dead, but it was too late to be in front page news and has since been forgotten. Just another example of controlling people’s viewpoint when emotions are high with stats.
https://www.breitbart.com/europe/2020/03/06/iitaly-49-people-die-of-coronavirus-in-24-hours/
acceleration…
Has the Italian strain mutated to become more lethal? From this article, about 4% of infected people are dying but, if I’m reading it correctly, for those who test positive only about 12% are “recovered.” What about the remaining 84% (those who neither died nor have recovered)? How bad off are they? Does anyone know about this?
see my reply below…
if it spreads through elderly communities, then it will appear more lethal than if it was spreading proportionately throughout all age groups…
https://www.breitbart.com/politics/2020/03/06/update-influenza-deaths-now-total-20000-including-elevated-number-of-136-children/
update: influenza death rate still less than 0.01%…
yes but how many people are actually getting tested? if more people test positive for this then wouldn’t that bring the numbers down? Statistically speaking..maybe they are only testing the elderly and really sick people. Causing an abnormality in the numbers
And probably vaccination (mostly done among risk groups) is of SOME use, keeping death rate artificially down.
A news item that may be of interest:
“21 People On Grand Princess Cruise Ship Test Positive – Pence (NBC)”
That’s not bad, out of 3500 passengers and crew. But look more closely:
“Of the 46 passengers tested, Pence said 21 people, 19 employees and two passengers, had tested positive.”
Oh dear, that’s an infection rate of 46%. But wait, maybe they tested only those with symptoms. Look once more:
“The California Air National Guard had delivered 46 tests to the Grand Princess, …”
Yes, they tested 46 because that’s all the test kits they had. 46 kits for 3500 people! If that is the official response, we can perhaps begin to be afraid. As usual, US health care proves itself the most expensive and least effective in the developed world.
It does save on making testing kits, however. I suppose that is the rationale.
““Of the 46 passengers tested, Pence said 21 people, 19 employees and two passengers, had tested positive.”
Oh dear, that’s an infection rate of 46%.”
but wait!
what if the test kits aren’t so good?
what if there were 25 false negatives?
the infection rate actually could be 100%…
But on the other hand, if the test kits are faulty, the infection rate could be 0%… Unlike every other health organisation in the world, the US CDC insisted on designing their own test kits. They were of course overdesigned, making them both expensive and unreliable. It is the famous “not invented here” syndrome, which I had my fill of working for a US startup company. They even had to build their own text editor, just to prove how clever they were. It understood programming language code, and understood it well enough to delete blank lines automatically, because they had no syntactic significance. That this made the code rather hard for humans to read never crossed their minds. The test kits, similarly, require three separate tests to be performed in succession; the third never worked and the response was to tell the testers to ignore it.
I have assumed that the first 46 to be tested would have been the sickest 46…
ergo, the feeling that all 46 could have the virus, since as has been seen in other reports, there have been many false negatives…
I suppose negotiations with China about tariffs are now on the back burner…
good read on CV19
https://harvardtothebighouse.com/2020/01/31/logistical-and-technical-analysis-of-the-origins-of-the-wuhan-coronavirus-2019-ncov/?fbclid=IwAR39pkEjxVIXAfCqV1GVVY5IJkdToXAC-TsmRMxOOFy5XEAv4HEl8HulFpU
from retired employee of Theoretical Biology Division of the Los Alamos National Laboratory,
with the help of a former NSA counterterrorism analyst. Tom Clancy misses his chance.
When the professional spooks are given permission to publish; I get scared very scared.
interesting logic (or lack of) on display in that article.
Guys, please check this out…
https://www.zerohedge.com/commodities/saudi-arabia-starts-all-out-oil-war-destroys-opec-flooding-market-slashing-oil-prices
Read the last 2 paragraphs of the article above.
This is what the financial “interconnectedness” means. Consequences that comes and bite you at the backside and you don’t even know that you may be bitten
thanks for that… it’s awesome…
“Incidentally, those wondering what is the worst case scenario for oil prices, consider that Brent traded at an all time low of $9.55 a barrel in December 1998, during one of the rare price wars that Saudi Arabia has launched over the last 40 years… similar to just now.
Could the price drop even lower now? Yes: back then there was no coronavirus pandemic destroying global oil demand.
One final point: with 10Y Breakevens driven almost entirely by the price of oil…
… once Brent craters on Monday to the mid-$30s or lower, the accompanying implosion in 10Y yields could make the record plunge in yields seen on Friday a dress rehearsal for what could be the biggest VaR shock of all time.”
The Asian Financial / Debt Crisis starting in 1997 is likely to have been largely responsible for the low oil demand in 1998 which led to low oil prices in 1998.
Inflation adjusted this is north of today’s $25price level..
Besides the comparisons can’t be 1:1 to 1990s since then lot of happened:
– NorthSea decline
– lesser ~OPECs gangbanged hard (Libya, Iraq)
– US printing domestic alt oils
– Russia re-consolidating its exctractive industries
– China hockey stick effects..
..
.
=> Hence my assumption is that anything south of today’s $30 oil price means the last GFC_ver_xy event ever, because afterwards there is no IC to speak about or build up from ashes again..
“This is what the financial “interconnectedness” means.”
good point…
so…
I predict almost ALL economic numbers will be crashing on Monday…
not that it matters much, but short positions will be huge winners…
wow…
Monday March 9, 2020…
I don’t ever remember a forthcoming day that looked so much like full blown insta-Doom…
we are swiftly nearing Peak OFW Doom…
Doomers gonna doom…
Yep, now I watch the news on the HD set with “energy saving off” setting for the highest viewing quality..
In term of shorting, and if keeping the trends yes even the basic “retail” instruments might give you upto ~10k % profits from January to summer, the question remains what kind of world is there awaiting at that stage, not mentioning the likely issues with exchanging “the winnings” for non existent food, spare parts etc. Also perhaps even the bank-trader ratting you out for obscene panic inducing scheme etc.. We don’t know what kind of crazies the future brings about..
This article is truly disturbing. It alleges that Saudi Arabia plans to start a price war. It plans to ramp up production to 10 or 12 million barrels per day, and offer its main grades at prices far below their normal benchmark to Brent. In this way, it plans to to take oil sales away from the US and Russia, and drive prices far below the low prices seen on Monday. We likely will see huge further oil prices drops, into the $20s or even teens per barrel.
I would imaging these kinds of actions could cause military responses. Or derivatives could start having problems. Saudi Arabia’s currency peg to the dollar could fail.
A person worries how this would turn out.
“What was Allah thinking when he let this inbred Bedouin gang of desert bandits pitch their tents on top of the world’s largest sea of oil and become the tour operators of the annual multi-million-footed Allah-required pilgrimage to Islam’s hallowed ground zero, Mecca & Medina??? It’s not too late to correct this cosmic mistake. But it’s gettin’ there…”
“I would imaging these kinds of actions could cause military responses.”
that’s an interesting future scenario…
perhaps very soon (tomorrow or Monday) SA could find their oil facilities facing another “drone” attack…
not a prediction, but…
Gail,
Serious comment, we buy all we can, all they will sell, pump it back into the fracking wells, pump it out and instant profit given a few years. We still have the Fed, trade paper for stuff, heck of a deal.
Dennis L.
that might just work…
but perhaps more probable that China buys as much as they can and stores it…
assuming that China and/or the world doesn’t reach Collapse first…
This would be clear violation of the petrodollar arrangement for SA, unless they have plan B (~RuChinese on the ground + alt trading currency-credit vehicle), which they don’t have at the moment. So, this is not realistic assessment.
Or the times in general are ripe for imminent global realignment, so it would flip “naturally” only front loading it, again little evidence for that one as well, so very low prob now.
Interesting quote:
“The single biggest threat to man’s continued dominance on this planet is the virus,” the Nobel Prize-winning biologist Joshua Lederberg.
and thus spoke a biologist…
who perhaps doesn’t know about declining net (surplus) energy…
I can believe this.
I checked and the actual quote in 2014 was
https://www.newyorker.com/news/daily-comment/whats-ebola
So clearly, Joshua Lederberg meant viruses in general, not necessarily ebola or the current coronavirus.
Did anyone watch this series? https://en.wikipedia.org/wiki/Chernobyl_(miniseries)
There was a part where they said if they didn’t dig some sort of trench beneath the storage ponds (the part where they were digging naked because it was so hot), that half of Europe would have been made ‘unlivable’ because the ponds would have leaked and poisoned the air and land.
Is that true? And if so, I bet China’s factories supply the parts to keep these facilities functioning all around the world. What happens if China’s factories don’t re-start?
Wife and I last evening watched ‘Contagion’, a 2011 movie with Jude Law, Lawrence Fishburne, Gwyneth Paltrow, Matt Damon & Kate Winslet, about a pandemic virus. You have to wait until the end of the movie to find out how the virus got started, but cutting to the chase, a bat eats some banana, drops a piece in a pig farm, a pig eats it, an Asian chef buys it, cooks it, wipes his hands on his apron, then shakes hands with Gwyneth Paltrow. She then gives it to other people, including some guy she’s cheating with on husband, Matt Damon. Paltrow dies, the Dr. tells Damon she’s died and Matt says, “Ok, so when can I talk to her?”
The movie though has some good science moments of discussing information relating to the virus. Eventually a vaccine is distributed, but that takes a long time because we’re talking about everyone still alive in the world. Meanwhile people remain in their homes. How they get food is not shown.
You forgot the part where WHO doctor, Kate Winslet, dies…
https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fi2.wp.com%2Fbasementrejects.com%2Fwp-content%2Fuploads%2F2011%2F09%2Fcontagion-2011-movie-dr-erin-mears-infected-sick-death-kate-winslet-review.jpg&f=1&nofb=1
Cheers,
-GBV
Dang… that was supposed to be a picture, not a link to a picture 🙁
I didn’t forget – just didn’t include all parts. How about Jude Law selling Forsythia, a home remedy as a cure for the virus? It’s a movie that seems apropos while this pandemic is sweeping through. But the movie also fails in some ways, like what about the global economy? They act like it will just take a break while the pandemic is a problem then suddenly jump up and work again.
I doubt at this stage of the oil age (that requires CB’s to take an active role just to eek out minimal growth) that taking several months off to stay at home and wait the worst of the virus spreading, will not take down the economy. Trying to restart the economy won’t work fast enough to get people back to their regular routine. It would take a long time and meanwhile we’ll all be starving.
is anyone watching opec? I wonder if Russia thinks it can bleed out the other players in the oil game thereby giving it a great advantage. They have been trying to corner the oil market for sometime. This article says that russia has low extraction cost which I think is bull shit…because it has high overhead as well but it is interesting to see how they are playing. Extraction cost is something I can never get a straight answer and one time they are high in eagle ford and baakan and another report will say that they are low….
https://www.zerohedge.com/geopolitical/russia-just-told-world-no
There are probably three parts to extraction costs: (1) the direct cost of extraction, (2) the amount the government needs in taxes on the extracted oil to keep up its system, and (3) the cost of borrowed/invested capital to keep the operation going. Lowering interest rates sort of helps (3).
The reason you can’t get a straight answer is because Item (1) isn’t really the right answer. Also, the amount the government needs in taxes depends on population, among other things. It can sort of get along with less for a little while, but eventually, there is a problem with the government being overthrown.
Well low interest rates will help but low oil prices are going to shut down a lot of wells and layoff a lot of people I wonder how the Texas economy will do without that revenue. More argument for recession there is going to be a crazy week on the stock market this week. Que the talking heads telling us to stay in the market…..its all good
https://www.zerohedge.com/geopolitical/russia-just-told-world-no
yes, as a matter of fact, I am watching OPEC+…
“Russia told everyone they are prepared for lower oil prices.”
“Russia can ride out, if not thrive, in this low price regime because:
the ruble floats to absorb price shocks in dollars.
a majority of their oil is now sold in non-dollar currencies – rubles, yuan, euros, etc. – to lessen their exposure to capital outflows.
the major oil firms have little dollar-denominated debt.
low extraction costs.
its primary governmental budget ebbs and flows with oil prices.
All of this adds up to Russia holding the whip hand over the global market for oil.
The ability to say, “No.””
so…
Russia would like higher prices, but are okay with lower prices…
so…
I assume Russia will be out of OPEC+… no more OPEC+…
OPEC now will have to make cuts of 10+million bpd to have a chance at higher prices…
such large cuts will do great harm to the economies of OPEC countries IF they don’t work to raise prices…
and I think they can’t get prices up… the coronavirus supply destruction and demand destruction is too powerful…
so…
for OPEC countries, it’s a lose/lose situation…
if the virus hits them all like it has in Iran, then it could be a lose/lose/lose situation…
Good summary. Yet we were not taken seriously talking this line just few weeks ago..
You are wrong because of the enormous government debt in Russia – oh, wait. Well, Russia can’t produce enough food to feed itself – oh, wait. Anyway, these arguments are silly. Russia is in trouble, because, “truth is more important than facts.”
I’ve recently been reading that Russia got rid of all of its foreign debt…
true or false?
and Russia is a net exporter of food…
true or false?
I thought the point of the article which I quoted was that Russia would suffer through low oil prices but that they were prepared to do so… ?
I’m putting together a song library to listen to if the worse comes to worse and I’m fading from this world to the other side stricken down by the China Viruses…..
One top of my list…
https://m.youtube.com/watch?v=bF2VVkdnehk
Here in Florida just in, two unlucky souls have died
Sen. Rick Scott on threat coronavirus poses to Florida’s economy
Florida’s tourism industry braces for disruption as coronavirus fears shake the American public
Florida Gov. Ron DeSantis issued an order Saturday directing a Level II public health emergency in the state after two people, who were both in their 70s and had traveled overseas died, according to the Florida Department of Health
Maybe a Hurricane can come in and distract the people!
Here in Florida just in, two lucky souls have died…
there, fixed it for you… 😉
The point is to limit social interaction. That is what brings the R naught down to around one. Nothing else works, as far as I know. That is a big deal for the older population. You may not realize it, but the safety of the older loved ones you have near you is in part based on your behaviour.
We have built an economy that very badly needs social interaction. Limiting social interaction collapses the economy, in not very long–weeks or months.
It seems to me that what traditionally brings the R naught down below 1 letting community immunity build up sufficiently that there are not enough people without antibodies to infect. If we look back historically, this approach is the approach that ended epidemics. It also helped overcome the problem of too many people relative to resources. With the smaller population, young people suddenly had more job opportunities, for example.
We have decided that somehow we are special. We can push the virus into submission. We think we should be able to have enough hospital beds and medical providers and medical equipment so that everyone can get through this epidemic nicely. Unfortunately, this doesn’t seem to be possible. But we are adamant that somehow we can fix the situation, at least for ourselves and our loved ones. The fact that the economy collapses, leaving us without food, piped water, electricity, and oil doesn’t occur to us to be a problem.
https://www.nytimes.com/2020/03/06/business/coronavirus-economy-us-china.html
Why the Coronavirus Could Threaten the U.S. Economy Even More Than China’s
The first place to look for answers is China, where the virus has spread most widely. The news has been grim with deaths, rolling quarantines and the economy’s seeming to flat line, though the number of new cases has begun to fall.
Advanced economies like the United States are hardly immune to these effects. To the contrary, a broad outbreak of the disease in them could be even worse for their economies than in China. That is because face-to-face service industries — the kind of businesses that go into a tailspin when fearful people withdraw from one another — tend to dominate economies in high-income countries more than they do in China. If people stay home from school, stop traveling and don’t go to sporting events, the gym or the dentist, the economic consequence would be worse.
In a sense, this is the economic equivalent of the virus’s varied health effects. Just as the disease poses a particular threat to older patients, it could be especially dangerous for more mature economies
This is not to minimize the indiscriminate and widespread damage that the disease has caused by disrupting the global supply chain. With shortages of everything from auto parts to generic medicines and production delays in things like iPhones and Diet Coke, a great deal of pain is coming from the closing of Chinese factories. That proliferating damage has central banks and financial analysts talking about a global recession in the coming months.
Nor is it to discount the possibility that the United States will be spared the worst effects. Scientific and public health efforts might limit the spread of the virus or quickly find a treatment or vaccine. The warmer weather of summer might slow the spread of the coronavirus as it usually does with the seasonal flu. Many things could prevent an outbreak as large as the one in C
But it is to say that an equivalent outbreak in the United States might easily have a worse economic
As a baseline, several factors work against the United States. China’s authoritarian government can quarantine entire cities or order people off the streets in a way that would be hard to imagine in America, presumably giving China an advantage in slowing the spread of the disease. In addition, a large share of American workers lack paid sick days and millions lack health care coverage, so people may be less likely to stay home or to get proper medical care. And 41 percent of China’s population lives outside urban areas, more than twice the share in the United States. Diseases generally spread faster in urban areas.
Beyond those issues, however, is a fundamental difference in economic structure: When people pull back from interacting with others because of their fear of disease, the things they stop doing will frequently affect much bigger industries in the United States.
Consider travel. The average American takes three flights a year; the average Chinese person less than half a flight. And the epidemiological disaster of the Diamond Princess has persuaded many people to hold off on cruises. That cruise ship stigma alone potentially affects about 3.5 percent of the United States, which has about 11.5 million passengers each year, compared with only 0.17 percent of China, which has about 2.3 million passengers.
But over all, the United States is substantially more reliant on services than China is. And, on the flip side, agriculture, a sector not noted for day-to-day social interaction and so potentially less harmed by social withdrawal, is a 10 times larger share of China’s economy than it is in the United States.
So for all the talk about the global “supply shock” set off by the coronavirus outbreak and its impact on supply chains, we may have more to fear from an old-fashioned “demand shock” that emerges when everyone simply stays home. A major coronavirus epidemic in the United States might be like a big snowstorm that shuts down most economic activity and social interaction only until the snow is cleared away. But the coronavirus could be a “Snowmaggedon-style storm” that hits the whole country and lasts for months.
So go wash your hands for the full 20 seconds. And show some more sympathy for the folks quarantined in China and elsewhere. Because if it spreads rapidly in the United States, it could be a heck of a lot worse.
https://www.worldometers.info/coronavirus/
Interesting article, Herbie. Thanks by the way to the poster that suggested using Chrome as a browser to replace my old one that couldn’t get the above link. Works great also for YouTube videos.
I know posters are getting use to these numbers but today is another big numbers day:
Italy +1247 to 5883
Iran +1076 to 5823
It’s like Italy and Iran are in lockstep.
France +296 to 949, soon to surpass 1,000
Germany +130 to 800
US +54 to 373
SK +448 to 7041
Interesting that South Korea’s new cases are declining from their peak daily increases. Looks like their efforts to slow the spread are working. I’m wondering if the US will balloon in numbers or if we’ll be able to do something similar to SK. Keeping those passengers on that cruise ship just off SF shore should help keep US case numbers down – lol.
https://www.kcra.com/article/cruise-ship-san-francisco-positive-coronavirus-california/31266014
“21 people aboard a mammoth cruise ship off the California coast tested positive for the new coronavirus and 19 of them are crew members, Vice President Mike Pence announced Friday, amid evidence the vessel was the breeding ground for a deadly cluster of more than 10 cases during its previous voyage.”
That last part presents an interesting question. Presuming the ship was thoroughly cleaned before embarking on a new voyage, was the cleaning sufficient to rid the ship of the virus or were the crew members carrying it without knowing?
Tomorrow half Italia Will be lock down. Red zone. They told now Is news. Monday market in Milano Will crak again
On related note, Germany banned exports of specific medical items, in turn Austria, which was dependent on this key source lacking own domestic production (enough?) in this field, just announced only emergency/accident surgeries from now own..
Mind you that’s one of the best healthcare system in the world, however as shown very JIT supplies oriented… Also circulating stories about the theft of cleaning and other supplies in hospitals, presumably by entrepreneurial newly arrived inhabitants..
I found “rubbing alcohol” in short supply. Some was available, but there was a 2 bottle limit on it.
Wow Marco, half of Italy?! The northern half? Will that include Rome?
According to the article:
Put this together with the many people who are throwing off viruses without actually coming down with COVID-19, there is a recipe for disaster.
I don’t see how this could be any worse in the U.S than China; they are both terrible. You have the largest manufacturing country basically shut down. What a dumb writer, its all about the U.S…. no its not. People have this notion that the U.S can operate on its own with no effects of recession overseas effecting the U.S….dummies… How long can the FED wait until another rate cut? My guess is they are hoping to make it through the week or month but won’t be able to.
“And 41 percent of China’s population lives outside urban areas, more than twice the share in the United States. Diseases generally spread faster in urban areas.”
so about 59 percent of China’s population lives INSIDE urban areas!
only about 800 million people…
so the author greatly misunderstands where the bigger urban problem is…
lolz…
There would seem to be very much greater risk of over-reach in China, and rebellion because of this overreach. I could imagine Mr. Xi losing his position as president. In fact, I could see a major breakup of the economy, if geographical areas of the economy cannot restart. China’s problem could directly lead to debt defaults.
The US will have a serious problem with supply lines that don’t work for as long as China’s production is down. The US’s problems could also lead to defaults. The world’s financial system is likely to be in disarray. It would seem like pretty much the whole world would have trouble, if China and the US have troubles.
And yet the Common Flu kills more than the “Coronavirus” each year. This whole thing smells fishy to me as if a group of individuals i.e. Davos Elites wanted to collapse the global economy and needed a scapegoat or a manufactured Black Swan.
Meanwhile at my local Walmart I can’t find basic liquid hand soap because I ran out and the shelves are bare.
big run at Costco also…
https://www.zerohedge.com/markets/panic-buying-and-stockpiling-americans-continue-epic-run-costco
USA flu season now less than 0.01% death rate…
COVID-19 latest approximation 3.4% death rate…
similar or not so much?
This is nothing more than “fear and hysteria” and Chris Martenson has been doing his part stoking the flames so he can sell more subscriptions to his website.
Rodster, it does not look like you understand what was said to you. The flue mortality rate is way under 1% and the coronavirus mortality rate is somewhere between 1 and over 3%. If we think about the older citizens, they get the virus from younger people and likely expire. Hopefully, you have a little more perspective now.
“Demand shock”. It takes the author a long time to get to the point, and then he sort of trips over it. The US is not a “service economy”; it is a “debt economy”. And the viability of a debt economy hinges on one factor only: the velocity of money. If it is high enough, the revenue stream can reassure the creditors, service the debt, and make a case for the debt to be rolled over rather than repaid. But when that velocity falls below a critical threshold, the debts become unsustainable and the economy collapses.
One of the best quick summaries ever, thanks.
“Lufthansa is cancelling about 7,100 European flights until the end of March, due to lower demand and the spread of the coronavirus. Thus, it will reduce capacity by up to 25 percent.”
https://www.google.pl/amp/s/markets.businessinsider.com/amp/news/Lufthansa-To-Cancel-About-7-100-European-Flights-Until-End-Of-March-1028970648
Think of all of the laid off workers, working for the airlines. Also, the lower revenue of the airports and the hotels near the airports. More people are likely to be laid off.
For those who are cynical about FEMA, there’s a lot of solid information in his presentation: nothing hidden, more or less.
How can Corona virus numbers in the U.S be accurate? I don’t know anyone who has access to a test….the numbers have to be way off. I know a lot of people who have had flu like symptoms….none have been tested for covid-19. I would not be surprised if they are purposely not giving out the test to keep people calm. Yes you can’t trust China….but the U.S is no better.
true… the virus has been racing ahead of the “reported” cases since the beginning in December…
the numbers must be higher than reported…
AND…
the virus must be closer in distance to each of us…
points to ponder…
Well first thing, do happen to have a few hundred thousand test kits in your back pocket?
Then it gets complicated …
I could recommend reading John Ringo though he writes good SF books he gets a lot of things very wrong. For fun a somewhat recent one was about a virus(rabies variant and the as we know it world ends) getting loose. Good read and first book may be instructional, 4 book series.
As I recall, by book three of the John Ringo series the storyline had “tanked” pinkly.
Nah it didn’t truly tank until the end of book 4, IMO.
Of course I like “Doc” Smith and Ryk E. Spoor space operas(what I am re-listening to right now) so my opinion is like most others, useless unless it is not. lol
T2M
I like when people talk about libertarian views and less government as if they are a tough independent person making their own way in this world….ha! ha! ! That would have been great in the 50’s but you are way past that now! The United States government and their antics are the only thing keeping this system going….including your SS Check Thinkstoomuch!
The savings rate you quoted is taken out of context as well. Look up how many people in your country have enough for retirement or just one bad downturn! America likes to print money and that’s just what they will do this week. The people in power don’t know of anything else….maybe lower interest rates again? If the U.S did not have the FED this system would have collapsed maybe for the better a long time ago. The U.S is in just as bad of shape as the rest of the world.
“Behind the turbulence are confusion and anxiety, and a sense that the modern world is in an unprecedented situation. “There’s no playbook for this,” said Derek Devens, a portfolio manager at the fund company Neuberger Berman. “That’s been really hard for people to digest…
“A sudden global disease outbreak isn’t the kind of risk that many market players were trained to react to. Few investors are epidemiologists. The most sophisticated financial models and the fastest-moving trading algorithms are flying blind.
“This you can’t even put a model on, because it’s not really something that we’ve seen before,” said Michael Feroli, the chief U.S. economist at JPMorgan.
“In financial circles, there’s a term for such events: a black swan. They are rare but ominous… Uncertainty breeds fear, and fear breeds panic.”
https://www.nytimes.com/2020/03/06/business/coronavirus-stock-market.html
Harry you have facebook?
I think in Europa we must be ready to live whitout currency.
Without currency most would die.
I think you almost need a gift economy to get along without currency. In such an economy, a person gains status by what they give away. If someone is very fortunate (say, wins the lottery), they are expected to share the benefits with everyone in the community. Gift economies only work when groups are small enough so that everyone knows one another. This limit is 150 to 180 people. Anyone who doesn’t share is kicked out.
I was going to ask how you can have a lottery without currency, but then I remembered Shirley Jackson.
I don’t think there will be Max8s built in a gift economy.
Right! Not many of today’s medicines either. For forget insulin and antibiotics.
The FAA is expected to gift Boeing by certifying the MAX8 safe to fly!
https://m.youtube.com/watch?v=-PKWTrR6Xs0
What’s tens of billions among friends!?
It may be that those with too much are kicked out, i.e. the 1% and better, or corollary, one can be a bear or a bull and make money, pigs go to market. Anyone here have any guesses as to whether 1% and up are first out or last? Bernie certainly is making some people nervous.
A guess, as things become more local those government employees with pensions greater than those paying the the taxes will quickly cease being paid, local councils will send no or fewer funds. As the Federal Governments of the world have less or nothing to distribute, they will lose control over local governments, local authorities will simplify and ignore some mandates.
This is unfortunate as pollution mandates seem to make a great deal of sense, that one is serious as China is showing. EPA is sort of a maintenance of the commons idea, the US has done a good job in this area, not perfect, but very good. Actually, the US has done very well in almost all areas accepting that nothing is ever perfect.
Always the optimist, maybe somehow we can come together and keep it together. I hope we don’t go down to the size you mentioned, that is a very limited skill set.
Dennis L.
Yes, that’s good point about local gov bodies suddenly stopping enforcement of upper level state level mandates for reasons of complexity, staffing, supplies/JITs, funding crunch. We discussed it earlier also in terms of inner balkanization process, Gail put it briefly in her article ~moth ago..
Dennis, what you have described is close to what happened in the later Roman Empire. The currency was debased, commerce faltered, the roads and harbours could no longer be maintained, … The result was a congeries of semi stable and semi peaceful successor states, which in course of time became Mediaeval Europe.
The same evolution nearly happened in the East, prefigured by the career of Zenobia, Queen of Palmyra (after whom one of my son’s cats is named), but in the event there were enough neighbouring greedy empires to swallow the fragments in their cradle.
Decentralisation and relocalisation can be a dark tunnel, but say not the struggle naught availeth.
Sharing like this is very much an Arabic cultural trait. I worked for a while in Oman, there you were expected to give what ever a person asked of you but it was very rude to do so. We were once camping in the desert when a group of Arabs drove up, sat down and drank all our beer.
Marco, we are already friends on Facebook – I am plain old Harry Gibbs there.
Well, we did in 1918.
But few are alive.
What are the odds of a recession this year?
100% in the USA and 100% globally…
it is certain because it’s already here and severe…
it will very probably be a Great Depression…
so only that technicality would not name it a recession…
Really? I have been trying to tell my family to get ready, but because they are big Trump supporters they think that the democrats are making a big deal about this to hurt his chances of being re elected. Even a recession is a political football! If I tell my family that the u.s economy is weak they think that I am being political! Unemployment is way down because you have over 10,000 baby boomers retiring every day! That is a lot of jobs! And the stock market is where it is because of the FED take them out of the picture and what do you have? With such low interest rates where else can you put your money! Oh well I guess they will find out soon enough….
“Oh well I guess they will find out soon enough…”
yes, in only a couple of days…
there’s a major crash coming on Monday…
What do you make of this?
https://www.zerohedge.com/markets/someone-big-was-utterly-blown-fk-out-heres-reason-behind-todays-unprecedented-vix-move
just another sign that the economy is on the cliff edge…
the VIX could spike to a record high on Monday…
but that would be minor news compared to its cause:
the crash of many commodities and markets…
we’ll know more in less than 48 hours…
“Unemployment is way down because you have over 10,000 baby boomers retiring every day!”
Funny when I looked it up the over 65 population increased 3% while the entire US population increased 6.9%, since 2010. Between 2017 and 2018 0.4% 65+ between unemployment rate went down 0.6%, according to a fred graph. So while 10,000/day sounds impressive it really means nothing. I think around 20,000/day die from heart disease, obesity or some such. So 10k means not much. After all many of them still work past that age, heck one my brother does, part time because he can and it gets him out of the house.
*Everything* is a political football, always has been, “Remember the Maine”. Of course the news media chasing after every, “If it bleads, it leads” story doesn’t help. The natural human attitude that “it ain’t my fault” contributes.
Remember when President Trump was trying to get people to make things here. And getting beat up about it. Be nice if all that stuff that *isn’t* being made in China *now* was made here. Wouldn’t it. Back to everything is political.
Higher power help us if he didn’t get beat up for trying to quarantine people, totalitarian don’t ya know. Then he gets beat up for not doing enough(far better justification, IMO). Heck, how do you enforce a quarantine without controlling your borders.
T2M
I don’t quite understand your numbers,,,”
“Funny when I looked it up the over 65 population increased 3% while the entire US population increased 6.9%, since 2010. Between 2017 and ”
Is this increase in number of working age people? Yes the economy has increased but what about the massive FED spending? What about the massive U.S debt? I am saying that the argument that we have a strong economy in the U.S is a dead cat bounce when you factor in the massive debt burden we are placing on the future. and maybe debts don’t matter and if that is the case lets add 10 trillion to the debt!!! That will really stimulate the economy! 700 FED rate cuts! What else ?!
“Remember when President Trump was trying to get people to make things here. And getting beat up about it. Be nice if all that stuff that *isn’t* being made in China *now* was made here. Wouldn’t it. Back to everything is political.”
No I don’t remember Trump bringing manufacturing here; I do remember him pretending to care and doing a lot of grandstanding but very little to make it happen…it is a great marketing tool just as big business uses green economy BS to sell more products….
Most of your argument is antidotal with very little facts just because you have one brother working part-time does not mean everyone does. I am not even sure what you are trying to say….
In response to Stella
March 8, 2020 at 1:04 pm.
You don’t understand the numbers, why am I not surprised. At least you admit it.
When the the percentage of people passing retirement age is less than the decrease in unemployment rate and the the labor force participation rate is increasing your retirement number is a useless factoid. Sounds great but means nothing or worse seems the opposite of the actual situation.
I actually read the 40 page pdf unemployment report there have been months when more people are getting employment than are getting added to the total US population. Unlike after 2008 when people were leaving the work force (labor force participation rate and employment to population rates were decreasing and unemployment was rising). Do I think it will continue, not a chance!
Are people actually retiring? To hear people talk, they aren’t, to make ends meet they have to keep working to stay fed and housed. So then they would be like my brother(for different reasons) drawing Social Security(“retired”) and still working. According to what is written!
“700 hundred fed rate cuts”
Wow, you really do have problems with numbers and geography (and countries) as well. According FED Graph , “Effective Federal Funds Rate” was .66% in January 2017. It is now 1.59%.
https://fred.stlouisfed.org/series/DFF
No worries, it is anecdotal.(sarcasm)
Which part of “TRYING” were you unable to comprehend. It is quite different than the imaginary statement your response was constructed against. Or for that matter what President Trump says.
The solar industry (and others) would like to talk to you about tariffs (more like whining over 2 or 3 percent of the installed system’s cost). That is all legally that the president is able to do. Especially after 20+ years of opposite efforts. At least he is renegotiating trade deals, Congress still has to approve the deals. As I have said before the President really is limited.
Of course it is all anecdotal if you fail to understand numbers or read what you want instead of what is written.
You think I like President Trump, actually I don’t. Thing is all the other choices were worse. No, I do not like the deficit. Does he remind me of a used car salesman, well yes he does. I lean more toward libertarian. Less government is generally better to a *point* …
Oh by the way, according to the Bureau of Economic Analysis the US personal disposable income includes savings rate as a percent of personal income. In 2019 Personal Saving is 7.9% of personal income. Highest it has been since 1999 with the exception of 2012.
https://apps.bea.gov/iTable/iTable.cfm?reqid=19&step=2#reqid=19&step=2&isuri=1&1921=survey
I hope that link works I had to navigate to it. It is in table 2.1.
I think I am done with this, probably shouldn’t even have typed this addition.
Enjoy,
T2M
PS: For a funny. A higher percent of the people in Maine are over 65 than Florida(a whole tenth of a percent). A different factoid I happened across. Who said all retirees are moving south. 🙂
PPS: Yep different things driving that in the two different states. Just funny to someone who did head to Florida to retire, early.
“A key indicator of Japan’s economic outlook fell to its lowest level since the global financial crisis, offering an early official sign that the coronavirus is pushing Japan’s economy into recession.”
https://www.google.com/amp/s/www.bloomberg.com/amp/news/articles/2020-03-06/japan-leading-index-flashes-worst-signal-since-financial-crisis
Finally when their (already paid for) mass produced hybrid tech would be pushed into almost every model econobox/mid/luxury, the industry goes down.. What a bummer..
Remember back in the day, Japan was just known for its Photography?
Mickey Rooney playing the funniest Mr Yunioshi!
https://m.youtube.com/watch?v=Hb3gdUrIC4Q
Japan’s largest camera trade show cancelled due to viral outbreak
February 14, 2020 (Mainichi Japan)
This March 1, 2018 photo shows a Sony A7 III, part of a new range of mirrorless cameras, at a trade show in Yokohama. (Kyodo)
TOKYO (Kyodo) — Japan’s largest photo industry trade show due to begin in late February in Yokohama has been cancelled because of coronavirus fears, an organizer said Friday.
“We put top priority on the health and safety of visitors and exhibitors,” Camera and Imaging Products Association, the organizer of the annual event, said in a statement.
The show for consumers, CP+2020, which was scheduled to be held for four days from Feb. 27 in the port city near Tokyo, was to feature the newest cameras and related devices.
About 135 companies, including Nikon Corp, Canon Inc. and Olympus Corp., had planned to take part in the exhibition, which has attracted about 70,000 visitors every year
https://mainichi.jp/english/articles/20200214/p2g/00m/0bu/097000c
Looks like a Recession is here Folks….Imagine that …surprise, surprise
in this midnight hour, I could go all in on the melodrama of the unfolding crisis… so why not…
the coronavirus has found me…
not personally, yet, but in 3 months it has replicated again and again as it has migrated half way around the world to get here in the northeast corner of the USA…
now we know for certain that the symptoms don’t show in persons for many days, usually, so what could we conclude from that?
why, of course, the virus has spread farther than where any case has been reported…
it’s ahead of the reporting…
by what distance of time and place?
who knows?
but if it’s being reported now and close by, such as less than two hundred miles and closing in, then where are the closest unreported cases?
at my workplace?
at the store I shopped at today after work?
at the local sports events/concerts which I haven’t attended this month?
and what will I do?
probably do what is decided by my employer…
if my workplace stays open, I’ll likely be there…
if closed, I suppose I will have a lot more time for internet melodrama…
https://www.worldometers.info/coronavirus/
now only 1 per million in the USA has been reported with the virus…
soon to be 10 per million, then 100 per million etc…
https://www.boston.com/news/health/2020/03/06/massachusetts-coronavirus-cases
8 total cases in Massachusetts:
“State officials Friday announced five new cases of COVID-19, all involving attendees of a meeting the Cambridge-based biotech company Biogen held at the Long Wharf Marriott hotel in Boston last week.”
while Biogen doesn’t seem to be involved with anti-viral applications, it is with great delight that I mention the sweet IRONY that this “biotech” company has found itself squarely in the beginning stages of a Boston epidemic…
my dear old friend Schadenfreude…
The worst case scenario is that the ‘official’ numbers for the virus are accurate, that what China did in the large lockdown, ‘worked’.
We ended up in China with ~70,000 people in the city of Wuhan being infected which swamped the hospitals with approximately 11,000 being serious or critical, again going off the official numbers of around 16% in that category and about 2,500 dying from the disease, ~3.5% of those infected.
This leaves in a city of around 11 million people, another 10,930,000 that have not been infected and are probably mostly vulnerable. How can there ever be any return to ‘normal’?
This week it has been discovered the virus has mutated creating a 2nd strain, that can also be caught. How long before there are more mutations that have an equally bad effect on the population, in terms of serious or critical cases and death rate?
I disagree with Gail’s comment above about seeing the beginning of collapse. I think we are seeing the next stage of collapse, a larger step down the seneca cliff, or an acceleration of the process of collapse. We (humanity), have been cutting back on research and new discoveries for decades now, basically since energy started increasing in cost per capita. Hence no-one was ready for this inevitable pandemic anywhere
Looking around at all the various web sites and chat groups I frequent, there is an underlying assumption that everything goes back to normal when we get over this virus. Apart from this site, there are very few that think there might not be any ‘normal’ again.
The current ‘choices’ seem to be isolating people, like happened in China, then when the virus rate gets very low, re-start economies. I don’t think we will get far into the restart when ‘lockdown’ happens again because of swamped hospitals. Also as appears to be happening in this country, when an infection is announced anywhere, the next day hardly anyone turns up for work in that location. So how does ‘normality return’? The answer is, it doesn’t!!
If there is some government decision to ignore the casualties, and just get the economy going again, what will be the death rate? High I would imagine, which by itself will take a lot of expertise out of the population. Work rates are going to decrease, availability of everything is going to be curtailed, inflation of everything is going to make the value of money go down (accelerated by central banks printing money).
I think we have just had an acceleration of the destruction of civilization. The interconnectedness of everything is also what will hasten the decline. On my third thought about prepping in the country, I think it is a good idea, as the masses in cities die off without realising what is happening to civilization over a period of time.
g’day mate…
“Looking around at all the various web sites and chat groups I frequent, there is an underlying assumption that everything goes back to normal when we get over this virus. Apart from this site, there are very few that think there might not be any ‘normal’ again.”
yes, most of us here are Doomers of varying degrees… 😉
I agree that this is a step down, at least…
decades ago, a recovery from this would have been probable, but now we don’t have the cheap FF and the growing net (surplus) energy…
it’s mostly downhill from here…
steep this year, but steep decline can’t go on for very long before IC collapses totally…
so either the steep decline subsides, and soon, or else it’s total collapse…
my opinion has mostly been on the side of slow decline and not fast collapse…
now I’m on the fence…
recall we were predicting it would be all over by 2025. now that date may be hard to reach, in tact.
of course, only a few were suspecting a plague as cause. most here focus on the resources available.
Yep, downsloping staircase profile all the way, but occasionally punctuated with acute systemic “black holes” of triaged out products, politics, regions, ..
I prepper for most bad scenario next 3 years. If Will be Better …Will be more Easy)
does that include fallout shelters? they were popular in the late 1950s.
If you are already worried about COVID-19, best not read this:
https://harvardtothebighouse.com/2020/01/31/logistical-and-technical-analysis-of-the-origins-of-the-wuhan-coronavirus-2019-ncov/
You have been warned!
From your linked article, Yorchian, which is lengthy, I’ve pasted below some of its highlights:
“In summary, somebody was entangled with the evolution of 2019-nCoV coronavirus. In addition to origins of natural recombination and intermediate host, the killer coronavirus probably originated from a laboratory in Wuhan.”
“Since its discovery, scientists have been unable to fully determine the zoological origins of COVID-19, it was initially thought to have passed through snakes, but now all that’s agreed upon is that it’s mostly bat in origin. This inability to derive an exact zoological source is exactly what would be expected if the virus had been artificially engineered to target humans.”
“Since it seems that the Wuhan Strain isn’t a mosaic of previously known coronaviruses, but instead draws from distant, discrete parts of the coronavirus family tree – not how these viruses naturally evolve. Because even mixing and matching coronavirus genomes from every known zoological virus, scientists couldn’t find any possible combination that would explain those regions of the Wuhan Strain’s genome.”
“Nor do we need to be tinkering with genetic material that holds the potential to wipe a significant percentage of us off the face of the Earth.”
“You have been warned!”
thanks…
the depth of the present/future tragedy doesn’t depend at all on whether or not this was man-made or natural-but-intentionally-released or accidentally-released…
it’s a sideshow, it’s entertaining…
but…
COVID-19 is very mild for children… that’s good, right?
it’s deadly for older/weaker… is that really so bad?
by the way, I’m older… 60+, and weaker in a limited way, mostly in good health, BUT my biggest weakness now seems to be colds/sinus infection/bronchial infection…
so I’m a prime target…
if it gets me, that won’t be so bad, if I miss out on The Collapse of IC…
but I’d prefer to watch the unraveling before I go… I hope the internet holds up so I won’t be deprived of all the latest info…
it seems like it will be amazing… and horrible… like seeing a car wreck where so many of us slow down and “rubberneck” to see the results…
What if someone decides someone was playing games and decides to add to the fun?
Some highlights:
Almost certainly man-made and escaped from Wuhan lab. Chinese authorities attempted to cover it up.
“the Wuhan Strain COVID-19 appears to be thirty-four times more lethal than the seasonal flu”
“A recent pre-print now gives COVID-19 a rating of R4, meaning each host passes the virus on to four new victims, a rate significantly higher than any past global viral outbreak.”
“the Wuhan Strain may be able to reinfect its own past hosts and use this molecular hijacking on antibodies left from its own previous infection to become far more virulent,..early reporting from Chinese doctors indicates that re-infections of the Wuhan Strain are far more lethal than the first”
The virus’ DNA contains HIV DNA, suggesting COVID-19 was an attempt to use a coronavirus as a carrier for a HIV vaccine.
“the Wuhan Strain may be using this shared HIV homology to attack CD4 immune cells just like HIV does, as an unusually high percentage of patients are showing low white blood cell counts, especially the sickest ones”
“a peer-reviewed study noted that one particular part of the Wuhan Strain’s spike-protein genome also wasn’t found in any of its relatives, “and may provide a gain-of-function to [COVID-19] for efficient spreading in the human population.” And according to that paper, this particular type of furin cleavage site makes similar viruses both more pathogenic and more neurotoxic.”
Due to its neurotoxicity “COVID-19 is also probably crossing the blood-brain barrier and killing its victims not just via pneumonia, but also by causing neurological respiratory failure.”
Similar themes seem to pop up in different articles. Vitamin C may at least partially mitigate some of these problems. Orally as a preventative, or by IV when the person is sick.
I am preppering to most bad scenario in Italia
Big inflaction in Germania aftr was war After big depressione was war. After crisis economia are war. I am Total sure 100 por cent Will be big war now . Because crisis Is too much big
What we are seeing is the beginning of collapse. Wars often go with collapse. So do overthrown governments, or governmental agencies that collapse because they cannot collect enough funding. I expect the EU will fail from lack of funding. Also, too many countries needing help or leaving.
Yes you very right. Euro broken soon. Intresting to see what currency we Will use
Water. Food. Ammo.
In better times:
Special drawing rights!
Italia Is death Who walk in green mile
“What we are seeing is the beginning of collapse.”
It’s happening fast too. In 6-8 weeks things could be gloally chaotic. Did you see the cruise ship in SF bay has passengers that tested positive for Corona? Trump wants them to remain on board, which means another virus cesspool like they had in Japan. What will happen to those people if they can’t get off the ship and more and more get the virus? Very dystopian vs. the joyful trip they were expecting.
“It’s happening fast too. In 6-8 weeks things could be globally chaotic.”
I’m getting almost too numb to make calls on this, but 50-50 is where I’m at…
which is surreal, when in fact up to now 2020 has been almost entirely BAU where I live and work…
I heard a few rumours at work this week where there have been “meetings” taking place about possible strategies for the coming months…
so yes, my local BAU could be disrupted in 6-8 weeks, or more, or less…
to be clear, I think local and/or USA disruption is certain, but chaos is 50-50…
there are way too many economic problems, and these will only get worse, in either of the two likely future scenarios:
1. shut down/isolate to prevent a pandemic… which is becoming very obvious that this causes more economic problems…
2. continue living/working… in this scenario, the older/weaker die off in a 5 to 10 to 20 % range, and the survivors have quasi chaos to deal with…
but, what the frack…
BAU tonight, baby!
“I’m getting almost too numb to make calls on this, but 50-50 is where I’m at…”
That’s why I included the word ‘could’, as in may or may not.
okay, got it…
chaos is a real possibility…
“The EU has told migrants in Turkey that Europe’s doors are closedas Greek and Turkish police fired teargas at their shared border amid growing tensions over the plight of Syria’s refugees.
“In a blunt message, the EU’s foreign policy chief, Josep Borrell, said: “Don’t go to the border. The border is not open. If someone tells you that you can go because the border is open … that is not true.”
https://www.google.com/amp/s/amp.theguardian.com/world/2020/mar/06/refugees-europe-closed-tensions-greece-turkey-border
“[US]Treasury yields plummeted to record lows Friday as concern about the global economic and financial impact of the coronavirus spurred demand for havens, while questions swirled about liquidity in the world’s biggest debt market…
““We are staring at the abyss of a credit crunch,” said Kaspar Hense, a portfolio manager at BlueBay Asset Management…”
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/u-rates-hurtle-toward-zero-103400835.html
“…the really dark signals are coming from the bond market, where the 10-year Treasury note is yielding well below 1 per cent — and a long away adrift of the current overnight mid-rate of 1.125 per cent set by the Fed. Look at real yields too, which are a guide to future growth expectations.
“The 10-year real yield has collapsed, nearing minus 0.6 per cent on Thursday. That suggests a deflationary shock, which is hardly good news for the economy or for corporate profits.”
https://www.ft.com/content/ef950c8c-5e6a-11ea-b0ab-339c2307bcd4
“Just before leaving work early on his 94th birthday Friday, former Federal Reserve Chairman Alan Greenspan gave a stark reminder of just how weird the U.S. Treasury market has gotten.
“Yields on 30-year bonds, he said, could go negative, joining more than $14 trillion of debt worldwide that already sports a rate below zero.”
https://www.bloomberg.com/news/articles/2020-03-06/greenspan-can-t-rule-out-negative-rates-on-30-year-u-s-bonds
“Global central banks have no room to fight the crisis caused by the coronavirus outbreak, according to Deutsche Bank AG.
“Policy failure is here,” George Saravelos, the bank’s global head of currency research, wrote in a note. “We disagree with central bank pronouncements that there is room to fight the crisis.”
“…If “yields are approaching zero, where do they see it?” Saravelos wrote. “If the price of money can’t go down the only thing to do is print more. The market is rightly pricing policy failure as evidenced by the collapse in yields and inflation expectations everywhere.””
https://finance.yahoo.com/news/deutsche-bank-says-policy-failure-111225031.html
It is possible to print money, but it is not possible to print finished goods to buy.
How can anyone fund pensions in this environment?
Bad news for pensions too.
https://youtu.be/m9cmAahzVEc
This definitely worth a listen. John Barry literally wrote the book on pandemics and response. Too bad we are not applying these lessons.
Very good presentation, thank you for finding it.
He must be rolling his eyes over what is going on now: mendacious and misleading messaging by governments and health experts, utter lack of preparation, pro-active adaptation, etc. But after all, it’s only human nature…..
Interesting and important stat from the video: ‘about 8 weeks to move through a community’, ie for bulk of infections to occur. Hard to get one’s head around that sort of speed, but that seems to be the informed consensus.
This accords with the estimate from the UK’s Chief Medical Officer which I cited earlier, of ‘about 9 weeks’ until peak -ie 90% of those who are going to catch it and fall sick have done so.
If community infection is being established now – as seems to be the case – we can look forward to a rather hellish April-May, and then peak infection will have been reached by June.
In that period, we may expect a large % of workers to be off sick, many businesses and premises to be closed, and severe disruptions to movement and availability vital supplies – disruptions which will continue for months even once most people are back at work.
Plan accordingly!
He also makes the point that medical care will devolve back to the level of 1918 as JIT supply chains of medical supplies are broken and disrupted.
I expect the timing varies somewhat with the epidemic. We know that historically epidemics have moved in waves. There may be several different waves. In fact, with viruses, they may come back year year after year in somewhat mutated forms.
Perhaps if we are lucky, the epidemic can move through the community in 8 weeks. But the epidemic is likely to be back later and hit those who were missed previously.
I think perhaps europe can withstand corona reasonably until summer saves us.
But next winter, or the one after, we grow tired of precautions, testing, working from home and quarantines… THEN corona spreads.
Xabier,
I spent almost 30 years in private practice and 15 in public health dentistry. Those who are politically involved in public health are good people, but getting them all going in one, consistent direction is a job in and of itself. It is who we are as humans, the trick is to get it to work, be intense without becoming emotional – much easier said than done.
In the end, achieving something that sort of works is better than nothing. From what I read, this is not the case on the battlefield, there is right, it works, you live, there is wrong, it does not work, you die. That makes for much less discussion and one would guess quickly eliminates those who are wrong too many times. It is ecology, not economics and we seem to be headed backwards from advanced economics to a more ecological based world.
Sitting here in a warm home, one might wonder if war is the result of much less surplus energy, discussions must be quicker, results are known quickly, bad policy literally dies at the same rate.
This man learned to navigate this world and be effective. Thanks Dan.
Dennis L.
People would like business as usual to continue, but it is doubtful this can happen.
Hence the need to be truthful for what to expect and what can and cannot be done.
That is the policy of the UK government: BAU for as long as possible, and then it all explodes in your face.
The thinking is, no doubt that the explosion will be in a brief time-frame – 2 months or so at greatest intensity – and the economic damage thereby less than would result from taking more advanced, proactive, measures.
This is not terribly fair to the health workers,of course, who will be treated as disposable crisis-fodder and have to bear the brunt of it all.
Rules are RULES
Demand for flights has collapsed around the globe amid growing fears about the coronavirus outbreak.
https://news.yahoo.com/airlines-burning-thousands-gallons-jet-124500643.html
Airlines are running empty “ghost” flights during the coronavirus outbreak because of European rules forcing operators to run their allocated flights or risk losing their slots.
Some airlines have wasted thousands of gallons of fuel flying the empty planes into and out of Europe.
Demand for flights has collapsed worldwide, with one airline-industry group saying the outbreak could wipe out up to $113 billion in sales.
UK Transport Secretary Grant Shapps wrote to flight regulators demanding that the “use it or lose it” rules be suspended to stop the ghost flights.
Well, the good news is the Aerosols masking effect will ensure we won’t have a spike!
I don’t think the situation is quite that way in the US, yet. I expect that starting next week, flights in the U S Willa be down. There is a lot of momentum from trips planned long ago.
“Demand for flights has collapsed worldwide, with one airline-industry group saying the outbreak could wipe out up to $113 billion in sales.”
I know from flying a lot that it’s easy to get a cold on a flight. You never know who’s sitting close and putting out so much virus you can’t get away. It’s happened to me twice, so I can see people avoiding flights. Jets have air circulatory systems that do not kill viruses or bacteria, because that would cost money and reduce revenue, so everyone on board breaths just about everyone else’s exhaled air. Most people realize these dangers when flying, so it’s not surprising people are not flying as much. I wouldn’t get on a flight going anywhere right now, not even if I was wearing a mask, partly for concern about possibly being quarantined.
The big question is; how long will the virus be circulating before people feel relaxed again about travelling? Could be a very long time, so then the question is for how long can the airline industry last? At minimum there likely will be some airline bankruptcies.
It would be nice to know, if the larger gov&private jets have filters and active purifiers installed as an option..
We talked about money, the velocity of money and the virus’ effect on those ideas. Now comes the Fed.
https://www.zerohedge.com/markets/who-warns-dirty-banknotes-may-be-spreading-virus-worldwide
Dennis L.
Oh, come on now. Don’t use cash because it might be dirty. That is a good way of discriminating against the small, more rural seller who doesn’t have the capacity to take credit cards or money transferred through cell phones. When the electricity goes off for good, or for 48 hours at a time, what happens? Do all transactions stop?
They don’t care – you could die and that would be fine.
India just did away with cash and Trump was just there gobbling up the crowd sizes to his events. You don’t think Modi didn’t let him on the skinny that to control the people you control the money. Trump likes him some power.
India did NOT do away with cash. They recalled old large-denomination banknotes and made people change them for new ones (which not everybody managed to do, since few banks etc. were willing to take the old ones).
Fear again, the FED fears a run on the banks, so suggest to the public using cash is to be feared. We are OK in the UK, it’s plastic we can wash it in disinfectant 😬
“Oil prices tanked more than 8% on Friday to their lowest levels since mid-2017 after Reuters reported that Russia balked at OPEC’s proposed steep production cuts to stabilize prices.
“OPEC’s plans for deep and prolonged output cuts were derailed as non-OPEC producer Russia refused to support the move, arguing it was too early to predict the impact of a coronavirus outbreak on global energy demand, sources told Reuters.”
https://www.kitco.com/news/2020-03-06/Oil-plunges-to-lowest-since-2017-after-Russia-rejects-steep-OPEC-cut.html
Let’s see how soon oil prices get to the $20’s.
“Oil prices tanked more than 8% on Friday…”
Huge shockaroo! WTI currently at $41.63, down $4.27 & Dow down 780 pts.
My Father often said, “People are emotional, not logical.” Right now the emotion of fear of Corona virus will in short order take down the world economy. It simply cannot sustain these lower levels of economic activity. If people were logical, they would understand this, ignore the risks and go about their lives to work, travel, eat out, etc. and I mean ignore it to the point of not even wearing masks. However, it appears that the emotion of fear will be the final nail in the coffin to end the oil age, because at this rate it won’t be long before 10’s, maybe hundreds of millions become homeless and without jobs.
We cannot close down economic activity without prices for commodities falling greatly. Needed businesses fail. I am afraid this is what hitting limits to growth looks like.
Fear and the herd instinct is one of our most important emotions and survival mechanisms but in the 21st century just in time, financialised supply chain they are lethal. What a mess we have got ourselves into.
The leveraged oil shorts today finally touched the ~300% mark since Jan.