ABC Suspends Socialist Correspondent After Project Veritas Sting
ABC Newssuspended senior correspondent David Wright after he was caught on undercover film by Project Veritasadmitting that the network bosses spike news that is important to voters, and that ABC is unable to provide relevant news to Americans due to their bias.
Wright, who joined ABC nearly 20 years ago, reports for “Wold News Tonight,” “Good Morning America” and “Nightline.”
“We’re not disciplined enough to cut [Trump] off and we second-guess ourselves because we’re sensitive to the accusation that we’re in the tank for the Democrats. And so that enables them, and so we enable them. And every time we take the bait on it and that’s what he wants,” Wright told a Veritas operative at the Doubletree Hotel in Manchester during ABC‘s coverage of the first Democratic primary.
“It’s totally and abusive relationship. He’s [Trump’s] the nightmare spouse that you can’t win an argument with,” Wright added.
“Would you consider yourself a Democrat Socialist?” Wright was asked.
“Oh yeah. More than that I would consider myself a socialist; like I think there should be national health insurance. I’m totally fine with reining in corporations, I think there are too many billionaires, and I think there’s a wealth gap–that’s a problem.”
Explosion Rocks Largest Oil Refinery Plant On West Coast
A massive explosion ripped through the largest oil refinery plant on the West Coast in the overnight hours, sending giant fireballs into the sky, visible from 20 miles away.
Fire crews on Tuesday night were dispatched to the Marathon Petroleum Corporation’s refinery in Carson, California, around 10:50 pm PST for reports of an explosion in a cooling tower.
The Los Angeles County Fire Department (LAFD) said the fire was contained hours later in the early hours on Wednesday morning.
#MarathonIC *UPDATE* Firefighters continue to make progress reducing the size of this fire, while providing protection to exposures. Residual pressure from remaining flammable gas is still contributing to limited fire activity. Engineers continue work to isolate fuel sources. pic.twitter.com/qVmZiA0sQW
Pricilla Reyes, a resident of Carson, told NBC Los Angeles that she heard multiple explosions at the plant before the fire broke out.
NBC Los Angeles’ photographer Kenny Holmes said the fire was visible from 22 miles away in Santa Monica.
LAFD said fire crews worked with refinery personnel to keep the flames in check via “fixed ground monitors” while working to depressurize the system.
LAFD said there was no need for a community evacuation considering the fire was contained.
The refinery is the largest on the West Coast, processing upwards of 363,000 barrels per day. The plant processes crude to make gasoline and diesel fuel, along with distillates, petroleum coke, anode-grade coke, chemical-grade propylene, fuel-grade coke, heavy fuel oil, and propane.
There was no word via Marathon or any other authorities if supply disruptions would be seen thanks to the incident.
Dramatic video of fireballs lighting up Carson’s sky was captured on Twitter.
Monday’s 1,000 point bloodbath was followed by Tuesday’s 879 point rout, lobbing 8% off total market value in less than 48 hours. The two-day drubbing has left traders and fund managers in a state of shock. Growing pessimism and uncertainty are pushing markets to the brink of a vicious downward spiral which will lead to heftier margin calls, more liquidations and fire sales, more knock-on pain among blindsided counterparties, and mounting defaults in the oil sector. So far, the Fed has waved off demands that it implement further easing by dramatically slashing rates, but its resistance will not last for long.
As institutional investors pile into risk-free assets and equities continue to swoon, the Fed will be forced to intervene once again this time buying up ETFs and individual shares to prop up inflated values and stop the hemorrhaging. While this latest iteration of QE could slow the selloff, it will forever undermine confidence in free market capitalism. Even so, the scheming miscreants at the Federal Reserve would rather save their own constituents than preserve the system that created the biggest and most prosperous economy on earth. It’s a question of priorities.
On Tuesday, Fed Vice Chair Richard Clarida said in a speech in Washington,
“It is still too soon to even speculate about either the size or the persistence of these effects, or whether they will lead to a material change in the outlook.”
This is just more diversionary jabber. The Fed spent the last 10 years fine-tuning a system that faithfully transfers trillions of dollars to its fatcat friends on Wall Street while the real economy sputters along at an anemic 2 percent. The Fed is certainly not going to throw in the towel now especially when its crooked pals are getting clobbered daily by a pandemic they never saw coming. Despite its vehement denials, the Fed has already settled on a Plan B that will involve a direct market intervention to purchase a set amount of individual shares per month that will be added to its already-bulging balance sheet. If the bloodletting persists throughout the week, we could hear the Fed make some type of announcement as early as Friday.
No one dreamed that a mutant virus could cause this much trouble and, in fact, very few have yet to grasp the long-range implications. The worst part for the markets is the nagging uncertainty. How long will the crisis last and how damaging will it be to the global economy? Will researchers find a cure or will the pandemic spread like wildfire incinerating the flagging economy on the way? No one knows for sure, which is why the only rational option for investors is to take some chits off the table and wait til the storm passes. This, of course, is a prescription for a full-blown stock market crash the likes of which we haven’t seen since 1929.
According to market analyst Mohamed El-Erian, “Coronavirus cannot be countered by central bank policies”. This means that slashing interest rates and injecting liquidity into the financial system (QE) will not prevent the widening economic carnage or stop the bleeding on Wall Street. This could be true, but we’re betting that the Fed will expand its existing toolkit and buy stocks directly hoping to put a floor under share prices. This is the only strategy that has any prospect of calming the markets and preventing a catastrophic “reset” that would essentially push stocks off a cliff.
On Tuesday, the benchmark 10-year Treasury yield fell to a record low of 1.32% while the 30-year Treasury dropped more than 3 basis points to a new all-time low of 1.7%. These rates are considerably lower than they were immediately following the terrorist attack on 9-11 which attests to the level of terror that has engulfed trading floors across the planet. What these rates indicate is that the markets are in deep distress, the lights are flashing red and the Wall Street sirens are howling. Investors are willing to lend the government money for a mere pittance in exchange for assurances that the government will repay them sometime in the future. The yields suggest that despondent investors see no sign of inflation or growth for the foreseeable future. The yields are an indictment of central bank policy which engineered the weakest recovery in post-WW2 era, inflated the biggest asset-price bubble in history, and is presently on-track to oversee the biggest stock market crash in the last century. The vast devastation of the US economy and financial system is largely the work of the Federal Reserve. Here’s an excerpt from an article at CNBC:
“The Centers for Disease Control and Prevention said that the coronavirus, or COVID-19 as it’s officially known, is “likely” to continue to spread throughout the U.S. and outlined what schools and businesses should do if the disease becomes an epidemic.
“Ultimately we expect we will see community spread in the United States,” Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases.
Total confirmed cases globally have surged to more than 80,200 and at least 2,704 people have died of the coronavirus. Overnight, South Korea reported 60 new cases to bring the country’s total to 893 infected, while China’s National Health Commission reported 508 new confirmed cases and 71 new deaths.” (CNBC)
The virus, that has not struck the US in any meaningful way, not yet at least. But it has reined down holy hell on the markets. It has pummeled the the airlines, the banks, technology stocks and the oil sector which is now on life support. The problem with domestic oil production was poignantly explained in a short video on CNBC. Here’s a clip:
“Capital’s John Kilduff said that the $50 level is critical for energy companies. “This is it, this is the line in the sand. This is where they really start to hurt. This is where they start to not be able to service their debt, this is where the expense ratio does not work for Wall Street, for private equity, for anybody,” he said Monday on CNBC’s “Worldwide Exchange.”
It’s getting grim in Galveston (Texas) because you have $87 billion in debt that is due between now and 2024 and 60% of that is speculative “junk”. The bonds of some of these companies are down to 50 to 60 cents per share. These were once $8 and $10 billion dollar companies. You have hundreds of companies in this space that are struggling to meet their debt obligations. I’ve said it before, Oil is a four letter word, D-E-B-T, and this is the last thing that an industry that is already crushing under the weight of debt, needs.” CNBC–See video here)
So, the oil producers are going bust which hurts the banks and private equity firms who loaned them money. Those debts may have been insured with derivatives that create a whole new layer of knock-on pain for other financial institutions which, in turn, contracts the system putting deflationary pressure on businesses that no one knew were connected to oil. It’s all one big daisychain that falls apart when the thread is broken.
So it’s not just the fact that the world’s biggest oil consumer, China, is down for the count or that oil is currently the worst performing sector on Wall Street or that oil has slipped below the magic “$50 per barrel” mark. It’s also linked to the Fed’s cheap money policy that has kept poorly-managed, over-extended companies puttering along while sinking deeper and deeper into the red ink. Coronavirus is pushing these companies towards a painful reckoning that will greatly impact the lenders who threw them a lifeline figuring that oil could only go higher. Their miscalculation will undoubtedly intensify a broader selloff in the market forcing the Fed to respond.
It helps to read Keynes theory of how markets perform in times of great uncertainty. During periods when the economy and society seem relatively stable and information seems somewhat reliable, it is easier to make informed investment decisions based on the way things have unfolded in the past. But in times of political and financial upheaval, investors are more likely to pull back and divest until they feel less anxious. Stock prices don’t reflect the current value of the stock as much as the expectations of shareholders who anticipate greater value in the future. The investors greatest enemy is uncertainty, the inability to feel confident in one’s view of what will take place in the future. A pandemic, about which little is known and for which there is no cure and no way to know how extensive the damage will be, could be the greatest challenge that global markets have ever faced.
Investors do not yet understand that the markets have entered uncharted waters. There are no familiar points of reference or stars to point the way forward. The only rational choice is to bail out until the situation clarifies itself and one’s objective again becomes visible.
NTSB Blames Tesla And U.S. Regulators For Fatal 2018 Autopilot Crash
You know things are bad for Tesla’s “autopilot” when regulators are not only blaming Tesla, but turning on other regulators. This is what happened on Tuesday, when the NTSB criticized Tesla’s “lack of system safeguards” during a fatal 2018 Autopilot crash in California. They also faulted the “scant oversight” of U.S. regulators, according to Reuters.
The chairman of the NTSB, Robert Sumwalt, said that Teslaignored safety recommendations issued in 2017 by the agency. “It’s been 881 days since these recommendations were sent to Tesla. We’re still waiting,” he said.
“Industry keeps implementing technology in such a way that people can get injured to killed, including this board’s recommendations intended to help them prevent such tragedies,” Sumwalt continued.
Since 2016, the company’s Autopilot has been tied to at least 3 fatal accidents. And why would Elon Musk rush to correct its behavior or pay attention to NTSB recommendations when there is no negative consequence to ignoring them?
Meanwhile, the NHTSA has been absolutely non-existent in forcing recalls or acting to sanction or regulate Tesla in any way. Recall, in late January, Senator Ed Markey said that Tesla should rebrand its driver-assist technologies and take “additional steps to ensure drivers pay attention to the road while using the system.”. Markey has been critical of Tesla’s driver-assist feature dating back months.
“Autopilot is a flawed system, but I believe its dangers can be overcome,” Markey said.
Markey also said he believes that Autopilot “promotes confusion about the limits of the system and the name undermines user manuals and instructions stressing drivers must remain in control of the car.”
Tesla all but thumbed its nose at Markey in the same way it has been thumbing its nose at auto regulators.
Which once again begs the questions we have been asking for years now: how long is the world’s love affair going to last allowing Elon Musk to get away with any behavior that he wants? How many people will have to die before the NHTSA pays attention and regulators sanction Tesla and Musk?
This is, of course, a rhetorical question, and the answer is simple: “as long as the stock keeps moving higher.“
As PeakProsperity’s Adam Taggart writes,for too many years now, the financial markets have been conditioned that “dips don’t last”. Confident that the Fed will always provide the liquidity needed to push assets higher, investors have come to believe that risk doesn’t matter.
But, after the last few days of market carnage…
The question that springs to mind is simple – Is the coronavirus the pin that will end the 10 year-long Everything Bubble?
Quite possibly, cautions Sven Henrick, technical analyst and lead market strategist for Northman Trader.
Well, covid-19 is exactly the kind of unexpected exogenous shock that central banks are powerless against. No amount of intervention by the Fed, the ECB or the PBoC will slow the spread of the virus, or force-start factories idle from workers quarantines.
So, what to expect from here? In terms of damage to market prices, we haven’t seen anything yet, predicts Sven.
And today’s failed recovery is a sign that the previously-bulletproof market ‘exuberance’ of the past decade is now losing out to ‘fear’.
Combine further spread of the virus with continued de-celeration of global trade, then “all bets are off” warns Sven.
Click the play button below to listen to Chris’ interview with Sven Henrich (44m:45s).
As Henrich wrote earlier in the day, all things being equal… this rally has been terrible. Yea, the headline numbers have been great due to the disproportional market cap weight of a few key stocks such as $AAPL, $AMZN, $MSFT, etc, the usual suspects.
But one of my key complaints has been the narrowing of the rally and the inability for other key indices to make new highs, such as transports, the banking sector and small caps.
And now the bill has come due as $NDX has flushed over 8% in a matter of days:
And with that flush comes the revelation that the index headline numbers were simply bogus.
Greatest bull market ever? With the banking index down nearly 10% on the year?
Hardly. A bull market that can be taken out this quickly in just a few days is reeking of weakness beneath. Not only in 2020, but even throughout 2019.
And we can see this structural weakness in $XVG the equal weight index:
I maintain that the Fed’s liquidity injections have distorted everything and caused a massive FOMO melt-up.
But what this chart shows is that despite all this liquidity the broader market simple hasn’t played rally. Yes we have had bigger and better prices overall and new records on the main indices, but look how weak the relative picture is versus 2018 on an equal weight basis.
Didn’t even get close.
And now we saw new highs on $XVG for January, but then a negative divergent lower reading in February before it’s now flushed lower.
At the same time we saw $SPX break a trend in January, retesting that trend from beneath with new highs in February and now falling to the way side making new lows versus January.
Oh we’ll get rallies again, but what $XVG shows clearly is that there has been something profoundly wrong with this rally since 2019 and into 2020 and hence it’s been a selling opportunity on strength.
Why is this important? Because we’ve seen $XVG being a major warning signal before. Guess when?
It was in 1998 when $XVG made a massive new high. As markets corrected in 1998 new rallies following produced ever weaker readings, not only on $XVG but also on the RSI. A big negative divergence as markets made new highs. That worked until it didn’t and then the bubble burst in 2000, not even 2 years later.
This time we had a big correction 2018 and now made new highs in 2020 on an eerily similar structure.
For rallies to be structurally sustainable we need to see a dramatic improvement in equal weight.
We haven’t seen this. All things being equal, this market has major issues that the Fed’s actions have been masking, but these issues are now well reflected in the charts.
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Trump To Hold News Conference At 6pmET To Dispel Media’s “Fake News, Panicking” Over Virus Outbreak
Having already urged the American public to ‘buy the dip’, just before another 900 point drop in the Dow, President Trump has decided to take matters into his own hands – the only way he knows how.
In a double tweet this morning, Trump announced he will hold a news conference at 6pmET to put the American people straight.,
“I will be having a News Conference at the White House, on this subject, today at 6:00 P.M. CDC representatives, and others, will be there. Thank you!”
The reason for his sudden need to address the public (aside from the 2000 points drop in the Dow) is that
“Low Ratings Fake News MSDNC (Comcast) & CNN are doing everything possible to make the Caronavirus look as bad as possible, including panicking markets, if possible. “
And responding to Democrats new narrative that The Trump administration is not doing enough, he lashed out:
“Likewise their incompetent Do Nothing Democrat comrades are all talk, no action. USA in great shape!”
One thing does make our eyebrows raise a little is the CDC official that raised what is somewhat unprecedented alerts yesterday has an interesting family linkage.
Dr. Nancy Messonnier, the CDC Director of the Center for the National Center for Immunization and Respiratory Diseases, warned ominously that:
“As more and more countries experience community spread, successful containment at our borders becomes harder and harder. It’s not a question of if this will happen but when this will happen and how many people in this country will have severe illnesses.
…Disruption to everyday life might be severe…
…We are asking the American public to prepare for the expectation that this might be bad.”
In addition, Messonnier warned that it may soon become necessary for schools and businesses to greatly restrict person to person contact…
The CDC outlined what schools and businesses will likely need to do if the COVID-19 virus becomes an epidemic outbreak in the U.S. Schools should consider dividing students into smaller groups or close and use “internet-based tele-schooling,” Dr. Nancy Messonnier, director of the CDC’s National Center for Immunization and Respiratory Diseases, told reporters on a conference call.
“For adults, businesses can replace in-person meetings with video or telephone conferences and increase teleworking options,” Messonnier said.
Can you ever recall a top CDC official ever making statements this ominous?
Well, it turns out Dr. Nancy Messonnier is the sister of the former Deputy Attorney General Rod Rosenstein who appointed Special Counsel Robert Mueller.
Could she be part of the resistance?
Remember, it was reported that CDC employees cried when Trump was elected.
Futures Spike After Germany Yanks “Debt Break”: Berlin To “Temporarily Suspend” Limit On Public Borrowing
The Germans may have opposed closing borders in response to the outbreak in Italy, but it appears Berlin is planning to do something about the outbreak.
According to reports, the Germans are stepping up to suspend Berlin’s longstanding constitutional “debt break” and deliver the fiscal stimulus for which economists have been begging.
To try and prevent a full-blown recession as economists downgrade their projections for European economic performance, the German government is planning to temporarily suspend constitutional limits on public borrowing in order to offer debt relied to struggling municipalities.
GERMANY PLANS TO TEMPORARILY SUSPEND LIMIT ON PUBLIC BORROWING
Futures jumped on the headline, as the Germans openly endorsed the prospect of a robust fiscal stimulus to buttress the global economy against any virus-related fallout.
The market should have been primed for reports of German stimulus, even if Berlin hasn’t always been thrilled with the idea: Remember back in September, when there was all that talk about a “shadow budget”?
Rumors about the plan to modify the debt brake appeared in a leaked report that hit a few hours before the official confirmation.
Finance Minister Olaf Scholz plans to modify the debt brake provision in the German constitution so that the federal government can assume some of the obligations of heavily indebted municipalities, Die Zeit newspaper reported.
The debt relief plan, proposed by the finance ministry some months ago, would see the federal government assume some of the debts already built up by the municipalities. Currently, however, the constitution sets strict limits on debt accumulation by the government.
Is this decision such a surprise from the notoriously tight-fisted Germans? It was only a matter of time before governments confronted the fact that there might be only way to deliver another jolt of life into Europe’s zombie economy before they’re swept aside by anti-EU populists.
“A Cry For Help”: Global Sell-Off Accelerates On Rising Coronavirus Panic
With little other data to guide risk sentiment, traders remained in thrall to the barrage of coronavirus headlines with last week’s bizarre complacency now completely shattered as volatility soars.
As a result, with the global pandemic now getting worse by the day, world stocks tumbled for the fifth straight day on Wednesday, while safe-haven gold rose back towards seven-year highs and U.S. bond yields held near record lows after governments and health authorities warned of a possible coronavirus pandemic.
Overnight, the closely watched South Korean cluster reported 115 additional cases as of 4pm, after announcing 169 as of 9am this morning, according to a statement. Among a total of 1,261 cases vs. 51 a week ago, 710 were confirmed from Daegu and 317 from neighboring North Gyeongsang province Total death toll is 12; one fatality includes Mongolian citizen.
South Korea also said 16,734 people are currently being tested for coronavirus, up from 13,880 last night. Many of them are being tested as a precaution. Also overnight, Italy reported an additional 19 new virus cases, with the death toll now at 12. French health official announced three new confirmed COVID-19 cases in France, as well as the first death. Spain reported 2 more cases of the coronavirus, including the first case in Madrid, with 7 total cases reported in the last 24 hours. While Poland has recorded its first case as has Greece, according to press reports. Brazil’s Health Ministry said a man has tested positive for coronavirus in an initial test, with subsequent tests confirming this; in the first case for Latin America. A second coronavirus case has been reported in Africa, tests indicate an Italian adult who arrived in the country on 17 February has tested positive, according to WHO Africa.
In short: a deadly virus has now gone global and no matter what the WHO says, it is now a pandemic; for those who do care what the criminally corrupt World Health Organization did say, the WHO’s Tederos said using the word ‘pandemic’ carelessly has no benefit, could amplify unjustified fear and stigma; word might also signal that the virus can no longer be contained, “which is not true.”
Meanwhile, amid fabricated numbers, the virus has claimed almost 3,000 lives (the real number is probably over 100,000) in mainland China where drastic travel restrictions slammed the brakes on China’s manufacturing and consumer spending, and there are worries other countries will face similar disruptions.
“China’s template to contain the virus was to restrict economic activity and that’s hitting home. Markets are fearing there will be sequential shutdowns of economic systems to stop the spread,” said Lombard Odier strategist Salman Ahmed. Those fears of severe economic damage, and eventually a global recession if not depression, have sent MSCI’s all-country equity index to 2-1/2-month lows, wiping almost $3 trillion off its value this week alone.
US Index futures initially rose, then plunged, then rebounded and were trading modestly in the red at last check while stocks in Europe and Asia tumbled.
In EUrope, the Stoxx Europe 600 Index declined for a fifth session, its longest down streak since July, as Diageo Plc and Danone SA warned the virus outbreak will hit sales in China. The first cases in Greece and in South America were reported, while Spain locked down a resort hotel in the Canary Islands with about 1,000 guests and workers inside. Europe’s VIX, the V2X index, briefly printed above 32 – the highest since the Feb 2018 volmageddon – as European equities slumped as much as 2.5% before bouncing off the lows, all driven by reports of more virus cases outside of China.
The export-heavy DAX lags European peers but recovers half of the morning’s losses; sectors-wise, travel names shed more than 3%, financial services and chemical names lose over 2% as markets run for havens.
Earlier in the session, Asian stocks fell for the fourth day, led by health care and IT, on concern over the impact of the coronavirus amid infections outside of China continue to spike. Stocks in Sydney and Seoul led declines in Asia, with the won falling back toward its weakest since 2016 as South Korea emerged as a hot spot for the contagion. All Asian markets were down, with Thailand’s SET Index dropping 4% and Australia’s S&P/ASX 200 falling 2.3%. Trading volume for MSCI Asia Pacific Index members was 44% above the monthly average for this time of the day. South Korea has emerged as the hot spot for the virus as infections surged pass 1,200. Italy and Iran have reported 11 and 15 deaths respectively. The Topix declined 0.8%, with Daitobo and Segue falling the most. The Shanghai Composite Index retreated 0.8%, with Irico Display Devices and Ningbo Tuopu posting the biggest slides
In rates, ten-year Treasury yields edged up from a record-low close set Tuesday, while a dollar gauge rose. Bund and Treasury futures pare Asian losses with curves bull steepening. ECB-dated OIS rates price a 10bps rate cut by Dec. ‘20 for the first time since October last year. Gilts rally sharply, gains in 10y futures capped around 135.00. Peripheral spreads widen more aggressively with Bund/BTP trading through 150bps. Money markets also price roughly two 25-basis-point rate cuts by the Federal Reserve. A Bank of England rate cut is also fully priced for September.
“Part of this selloff is a cry for help,” Ahmed said but he said Fed cuts were unlikely in the early part of the year unless “we get an Italy-like situation in the United States.”
In FX, G-10 FX slips versus USD as rate cut expectations weighed on the dollar while continued to pullback against the yen from recent 10-month high of 112.23 yen. It traded around 110 yen. greenback also came off an almost three-year high against the euro, reached on Feb. 20 while it remained flat to a basket of currencies.
The Swiss franc advanced a second day and Treasuries rose with bunds, with emphasis on the front-end of the curve; European peripheral bonds sold off, led by Italy, amid increased credit risk. Money markets are pricing a 10-basis-point ECB interest-rate cut in December 2020, the first time a full cut has been factored in for this year since October. The euro recovered to trade little changed against the dollar; the Stoxx Europe 600 Index dropped for a fifth straight session, suffering its longest losing streak since July. The pound fell and gilts rallied as negotiations between the U.K. and the EU over the two sides’ future trading relationship were expected to get off to a tense start, with the Westminster government’s strong majority giving extra credence to its threats to walk away without a deal. The Australian dollar dropped after hedge funds sold the commodity currency, triggering stop-losses, as concerns grow over the widening impact of the coronavirus. The yuan rose against its peers for a second day as investors started to price in the virus outbreak globally instead of a China domestic event.
“The significant dovish tilt being priced in by markets from the Fed may not materialize and that might cause the next leg of the dollar rally,” said Peter Chatwell, head of multi-asset strategy at Mizuho.
The dash for safety also boosted gold 1% to around $1,650 per ounce, heading back towards seven-year highs of 1,688.66 hit on Monday. Brent crude futures fell 1% to $53.95 per barrel.
Expected data include new home sales. Lowe’s, TJX, and Wendy’s are among companies reporting earnings. Turning to the day ahead now, the highlights include January’s US new home sales and the MBA’s weekly mortgage applications. From central banks, there’ll be a number of ECB speakers, including President Lagarde, as well as Makhlouf, Panetta and Holzmann.
S&P 500 futures down 0.3% to 3,124.75
STOXX Europe 600 down 2.2% to 395.69
MXAP down 1.2% to 160.84
MXAPJ down 1.4% to 524.63
Nikkei down 0.8% to 22,426.19
Topix down 0.8% to 1,606.17
Hang Seng Index down 0.7% to 26,696.49
Shanghai Composite down 0.8% to 2,987.93
Sensex down 1.1% to 39,838.26
Australia S&P/ASX 200 down 2.3% to 6,708.10
Kospi down 1.3% to 2,076.77
Brent futures down 1.3% to $54.26/bbl
Gold spot up 1% to $1,651.79
U.S. Dollar Index up 0.1% to 99.09
German 10Y yield fell 1.3 bps to -0.525%
Euro up 0.06% to $1.0889
Italian 10Y yield rose 2.0 bps to 0.822%
Spanish 10Y yield rose 3.4 bps to 0.247%
Top Overnight News from Bloomberg
Europe remained on high alert for coronavirus cases as Spain joined Italy and other nations in battling to contain the disease, confining around 700 guests to a Canary Islands hotel while they undergo tests. The number of infections on Tenerife climbed to four
Global investors are stashing more and more assets into gold as the coronavirus outbreak spreads and appetite for risk takes a hit. The global tally of bullion in exchange-traded funds swelled by the most in more than a month on Tuesday as equities sank. That was the 25th consecutive day of inflows, a record. At 2,624.7 tons, the holdings are the largest ever
Japanese Prime Minister Shinzo Abe called for major sporting and cultural events to be called off, postponed or scaled down over the next two weeks, saying the move was crucial in preventing the domestic spread of the new coronavirus
Hong Kong’s government unveiled a budget packed with giveaways including a one-time cash handout that economists said isn’t likely to spur growth, as the city struggles to stabilize an economy battered by political unrest and the coronavirus
Global banks including UBS Group AG and Bank of America Corp. are broadening their contingency plans across Asia to ensure they can keep trading and other operations running as the spread of the coronavirus accelerates outside China
Bank of England will apply tougher haircuts on Libor-linked collateral in its operations from October. BOE Executive Director for Markets Andrew Hauser announces move as part of measures to accelerate replacement of Libor, which he says is a global stability risk
Asian equities traded mostly lower, with losses across the board for a bulk of the session after Wall Street experienced another bleak session which saw the DJIA shed almost 900 points, whilst the S&P posted is largest two-day loss since August 2015 and the Nasdaq turned negative for the year – traders were also spooked by the 10yr Treasury yield falling to a fresh record low of ~1.3070%, which came as a function of the rising virus fears. ASX 200 (-2.3%) continued to be pressured by its heavyweight financials and mining sectors, whilst Nikkei 225 (-0.8%) bore the brunt of declines across mining and auto names, but Canon shares rose around 4% at the open on the back of reports that the Co. has started developing a coronavirus testing kit. The index drifted off lows as it tracked the movements in USD/JPY. KOSPI (-1.3%) conformed to the regional declines following its breather session yesterday, as confirmed South Korean cases topped 1000 vs. 51 a week ago. Over in China, Hang Seng (-0.7%) was weighed on by losses across its oil giants, entertainment stocks and financials – which together account for almost 70% of the index, although the index pared some losses upon the unveiling of the Hong Kong budget, which announced a HKD 120bln package of measures to bolster the economy. Shanghai Comp. (-0.8%) opened lower by over 1% but thereafter trimmed losses despite the PBoC skipping OMO for a 7th consecutive day, after the latest China virus numbers showed a slowing rate of new cases and deaths.
Top Asia Headlines
Virus Damage to China’s Economy Clear From Early Indicators
The Race to Lead Malaysia Comes Down to Two Long-Time Rivals
Jet Air Creditors to Ask Court to Extend Liquidation Deadline
Lebanon Faces a $50 Billion Hole Even Beyond Its Eurobonds
Stocks in Europe (Eurostoxx -1.2%) have once again fallen victim to the fallout of COVID-19 as the virus shows no sign of abating outside of China. The velocity of the selling pressure in Europe has been noteworthy with interim support levels proving to be futile (e.g. FTSE MIB has now entered correction territory from last week’s highs). That said, ahead of the US entrance to market, indices have nursed some losses as markets paused for breath following recent selling. In terms of the case count, reporting for the purposes of a written report is particularly difficult given the fluidity of the situation (as such we will refer you to the headline feed of the website), however, from a European perspective, Italy is continuing to announce further coronavirus diagnosis’, France has announced two deaths, Spain’s case tally continues to rise, Britain has stepped up preventative measures, Poland and Greece have announced their first cases. Again, this is just a small snapshot of where we currently stand and the situation is consistently evolving on an hour-by hour basis. Losses are relatively broad-based across sectors with defensive names unable to insulate themselves from the selling pressure. Notable specific laggards include, LSE (-2.7%) with Co. shares have been weighed on by FT reports that the Co.’s purchase of Refinitiv is facing increasing scrutiny by the EU, whilst travel names once again are a source of heavy underperformance with TUI (-2.1%), easyJet (-2.3%), RyanAir (-4.3%). Furthermore, corporate updates in the UK from Metro Bank (-17%) and Taylor Wimpey (-3.5%) have been poorly received with the latter hampering some of its UK peers. To the upside, Weir Group (+6.5%) top the Stoxx 600 post-FY earnings update, whilst Saipem (+3%) shares were lifted after exceeding 2019 financial targets and Danone (Unch) has been able to avoid negative territory despite cutting sales guidance.
Top European headlines
Avast Says Jumpshot Scandal Caused Brief Spike in Defections
Money Markets Start Pricing in ECB Interest-Rate Cut This Year
Spanish Hotel Remains on Lockdown With Europe on High Alert
Avast Says Jumpshot Privacy Scandal Impact Has Been Limited
In FX, all off best levels, but retaining a firm underlying bid as broad sentiment remains bearish on the ongoing spread and accumulation of COVID-19 cases/deaths further beyond mainland China. The Franc is probing above 0.9750 against a relatively depressed Dollar, though unwinding some gains vs a perkier Euro that has breached Fib resistance against the Greenback around 1.0887 and tested 1.0900, while reclaiming big figures at 1.0600 and 0.8400 in Eur/Chf and Eur/Gbp cross terms. Note, market contacts suggest the latter may have rebounded on month end factors and the usual RHS demand, while Eur/Usd could have derived some upside impetus from option expiries skewed towards the top of a 1.0850-1.0900 range (1.8 bn at the base, 1.2 bn from 1.0860-70 and 2.5 bn between 1.0890-1.0900). Elsewhere, the Yen has been meandering within 110.57-14 parameters and mindful of comments from Japanese PM Abe underlining a watching brief on nCoV and market moves in response to unfolding developments, while Gold has settled down after another bout of heavy selling to straddle Usd1650/oz again.
GBP/AUD/NZD/CAD/NOK/SEK – As noted above, the Pound has lost traction partly due to Eur/Gbp positioning for Friday, while Cable has retreated from 1.3000+ peaks amidst speculation of seasonal US selling on top of Brexit uncertainty that is hampering Sterling before UK-EU trade talks begin. However, the Aussie is underperforming in outright terms following much weaker than forecast construction data overnight, as Aud/Usd falls to fresh decade+ lows circa 0.6570 in contrast to a more resilient Kiwi clinging to 0.6300 ahead of NZ trade later. Another decline in crude has undermined the Loonie and Norwegian Crown, with Usd/Cad hovering just shy of 1.3300 and Eur/Nok up to 10.2300 at one stage, while the Swedish Crown is keeping its head afloat of 10.6000 vs the single currency after more Riksbank attempts to downplay weak inflation and Sek itself.
USD – The Buck remains prone to more pronounced demand for safer-havens and soft US Treasury yields, but the DXY is holding around 99.000 by virtue of bigger net advances vs the more high-beta, risk or cyclical currencies ahead of housing metrics.
EM – Aside from the overall negative tone, the Lira awaits news from Turkey’s first meeting with Russia on Syria to see if positive sentiments from the latter about finding an Idlib solution come to fruition, while the Rand is eagerly eyeing the SA budget at noon and Mexican Peso more macro news in the form of retail sales.
In commodities, WTI and Brent remain under pressure this morning, as another bout of wide-spread selling commenced as European players entered the market. At present, WTI and Brent front month futures are just off of session lows which are around the USD 49/bbl and USD 54/bbl marks respectively as downside pressure appears to have abated slightly as we approach the US’ market entrance; albeit, they are still down in excess of USD 0.50/bbl on the day. Focus this morning has been firmly on the coronavirus, with reports of additional cases in multiple countries just after the European cash open as well as the first death in France. Coronavirus contagion aside, next week brings the OPEC+ meeting and, as we continue to await Russia’s stance to the JTC’s recommended cuts, ING posit that OPEC+ will extend the current cuts and Saudi will continue to over-comply to offset the virus’s demand-side impact; it’s worth noting that doing so may be made modestly easier in the event that Libyan ports remain closed for the foreseeable future. Looking ahead, we have the release of the weekly EIA report, which is expected to print a headline crude build of 2.467mln; almost double last nights smaller than expected 1.3mln build via the API’s. Turning to metals, where spot gold is around USD 12/oz firmer on the day, but has retreated from highs at USD 1655/oz; a level which is comfortably below yesterday’s USD 1663.78/oz peak and the YTD’s USD 1689.29/oz mark. Copper prices remain subdued this morning, and within proximity to the USD 2.48/lb low for the year thus far; base metals more broadly remain similarly hampered on demand concerns from the virus.
US Event Calendar
7am: MBA Mortgage Applications, prior -6.4%
10am: New Home Sales, est. 718,250, prior 694,000
10am: New Home Sales MoM, est. 3.5%, prior -0.4%
DB’s Jim Reid concludes the overnight wrap
If you want a hint at how bad things could get logistically with the covid-19, my wife and I agreed last night that we were going to get an extra large shop this weekend to fully stock up our cupboards and freezer in case the disruptions become more widespread over the next week or so. I’d like to think we’re a fairly rational and balanced couple (you may think differently) so if we’re doing that I’d imagine there will be some pretty extreme things done and measures taken over the next few weeks as the virus spreads through the West. In terms of more scientific advice, here at DB research we are trying to give you as much colour as possible on the implications of the spread and if you haven’t already done so I think you’ll find it insightful to listen to the replay of yesterday’s call with our expert epidemiologist Dr. Michael Edelstein. You can see how by viewing this link here. As we warned you yesterday after our pre-call with him on Monday, the most likely scenario now is that this virus will spread across Europe as a minimum, and more than likely the US, causing a lot of economic disruption. As we also said yesterday it should be seen as flu plus or plus plus with a slightly worse contagion rate and a mortality rate likely between 2.5 and 5 times the flu’s 0.2% – so still under 1%. The commonly cited China mortality rate of c.3% is likely far too high due to numerous mild cases that have likely gone unreported in an area overwhelmed by the spread. It still also appears that the mortality rate is biased toward older men with pre-existing illnesses. A big difference to the flu is that this is a new virus and therefore humans won’t have built up an immunity of several years or decades.
Overall the long-term health consequences while serious for those unfortunately caught up in it are probably not the main macro issue, but the short-term economic consequences are a very major concern. Western governments and citizens are likely to increasingly be on lockdown to try to limit the risks of infections and contagions. Just yesterday there were stories circulating that a senior member of the International Olympic Committee said that if it proves too dangerous for Tokyo to host the Olympics this summer because of the coronavirus outbreak, organizers are more likely to cancel it than postpone. Expect the news-flow to get worse from here as the virus and the knock-on effects spread.
After the CDC warning last night (more on that below), the latest on the virus is that cases in South Korea have increased to 1,146, up 169 versus this time yesterday and comparing to just 51 cases a week ago with the vast majority of new cases overnight coming in Daegu with a US solider in the city amongst those testing positive. The first case has been confirmed in South America with a man in Brazil testing positive having traveled to northern Italy for work earlier this month. Worth highlighting also, Japan PM Abe has called for major sporting events and cultural events to be called off, postponed or scaled back over the next couple weeks with the PM also announcing a ban on people travelling from Daegu into Japan. Chinese State TV has also said overnight that China has quarantined 94 passengers from a Seoul to East China’s Nanjing flight after three passengers were found to have a fever on the flight. In total the number of cases globally now is 80,987 and deaths 2,761.
With the virus escalating more stimulus announcements are being made. Overnight, Hong Kong announced a HKD 120bn ($15.4bn) relief package which includes a payment of HKD 10,000 to each permanent resident of the city 18 or older. Markets still remain unsettled, however the good news is that moves have been comparatively more modest this morning. The Nikkei (-0.90%), Hang Seng (-0.56%) and Kospi (-1.13%) are down with bourses in China more mixed (Shanghai Comp is up +0.30% and CSI 300 down -0.05%). Futures on the S&P 500 are also up +0.49% while Oil has gained over half a percent. As for overnight data releases and highlighting the impact from virus, Hong Kong’s January trade balance came at HKD -30.6bn (vs. HKD -11.1bn expected) with exports slumping by -22.7% (vs. -3.7% expected) and imports coming in at -16.4% (vs. -2.5% expected).
In terms of European cases, Italy remains the worst affected country, with 322 confirmed cases and 10 fatalities, but the virus is continuing to spread around the continent, with Croatia, Switzerland and Austria all reporting their first cases yesterday. There were also dramatic developments on the Spanish island of Tenerife, where a hotel with around a thousand people was put into lockdown after an Italian doctor tested positive for the virus. With the upsurge this week, there’s increasing recognition of the potential impact on European growth, and Bank of France governor Villeroy de Galhau said that it was “very likely we will revise slightly downward our forecast”.
Yesterday was another tough day for risk with the main headline that US 10yr Treasuries officially closed the US session at their record low (1.352%) with our data going back to the birth of the nation in the 1790s. 30yr Treasuries also fell to a fresh record low of 1.825%. Using the WIRP function on Bloomberg, markets are now pricing in a 66.5% chance that the Fed will have cut rates again by their April meeting, up from 24.5% at the close last Wednesday. Meanwhile the 3m10y yield curve inverted by a further -0.3bps yesterday to close at -18.4bps, which is the lowest level since September.
Over in Europe 10yr bunds fell -3.1bps to -0.515% but Italian yields rose 2bps. This is fairly mild risk off for Italy probably reflecting that this is a global issue that happens to have some temporary immediacy in Italy for now. Having said that our economist published a note yesterday (link here) looking at the importance of the affected areas to the broader economy in Italy and the channels through which a virus shock, if not quickly contained, could create an economic shock. Structurally, the Italian economy is vulnerable to shocks. They also look at possible policy flexibility so a good note to review.
Elsewhere other haven assets also continued to be supported thanks to the widespread investor concern, with the Japanese Yen seeing its strongest 2-day advance against the US dollar since June 2019.
It was another torrid day for global equity markets, with the S&P 500 giving back its gains at the open to plunge -3.03% after warnings from the CDC to prepare for an epidemic in the US following the outbreaks and spike in cases across Italy, Iran, South Korea and Japan in recent days. This is the index’s 4th consecutive move lower, which is the first time that’s happened since last August. The index is down over 7% over the last 3 sessions, the worst 3-day performance since August of 2015. Selling was more widespread in the US, but Financials and Energy stocks saw the largest decline as the move in rates and oil (Brent down -2.40%) impacted them disproportionally. Volatility continued to climb, with the VIX index up +2.8pts to around 28 – its highest level since December 2018 when financial markets looked in horrible shape. On US equities as we’ve been saying over the last 2-3 months, the US market went into this virus outbreak priced for perfection with PE ratios only historically higher when we’ve been in a bubble. We’ve likened it to being at ‘bubble’ base camp. So although no one could have predicted the virus you could have said that markets were extremely rich and not pricing in any risk.
In Europe the STOXX 600 had a weak performance yesterday but closed before the peak of the US sell-off to close down -1.76%. This still leaves the index with its worst 2-day performance since the aftermath of the Brexit referendum in June 2016. Banks in Europe also underperformed in particular against the backdrop of falling yields, with the STOXX Banks index down -3.19% in the index’s 6th consecutive decline.
Fed Vice Chairman Clarida spoke late in the session. He reiterated that the coronavirus threats require close monitoring and that it will have a significant impact on China activity, but that it is too soon to assess the global and US implications. He emphasized that policy is not on a pre-set course and that the Fed will be taking it on a meeting-by-meeting basis – which may be obvious but also serves as a “go to” line for Fed officials that want to signal they are flexible. He didn’t give as much of a guide to current thinking as our economists thought he could have given the magnitude and momentum in recent market moves.
Coronavirus even came up briefly during the Democratic debate in South Carolina, where the candidates gave their last pitch to voters there, who vote on Saturday, and across all 14 states and American Samoa on Super Tuesday, 3 March. The national front runner, Senator Bernie Sanders, took a lot of attacks from his competitors in what was likely the most contentious debate of this cycle yet. However, it remains to be seen if there will be any material impact ahead of an important 2 weeks of primary voting.
Before that, there was an important development in German politics with the CDU leadership race, as health minister Jens Spahn, a contender in the last contest, announced that he would not be running for leader again and endorsed Armin Laschet. Laschet is a more moderate figure in the party and is currently the premier of North Rhine-Westphalia, Germany’s most populous state, whereas Spahn is considered to be a more conservative figure. The two will be running on a joint ticket, so that if Laschet is elected, he will put forward Spahn to become the CDU vice chair. Because they come from different wings of the party, this is a ticket that has the potential for broad support among CDU members, and poses a threat to the campaign of the more conservative Friedrich Merz, who campaigned for the leadership last time and also announced yesterday that he would be running.
Onto Brexit, and the EU published their mandate for the upcoming negotiations on the future relationship yesterday, ahead of the start of formal talks between the two sides on Monday. In the EU’s publication, they maintained their demands for a level playing field, saying that “the envisaged agreement should uphold common high standards, and corresponding high standards over time with Union standards as a reference point, in the areas of State aid, competition, state-owned enterprises, social and employment standards, environmental standards, climate change, relevant tax matters and other regulatory measures and practices in these areas.” However, the UK rejected demands that the UK sign up to the level playing field, with the No.10 press office tweeting that “The EU mandate stresses (reasonably) the importance of its own legal autonomy. We are equally determined to protect ours. That is the key point of Brexit and is fundamental to the sustainable long-term relationship the EU says it wants with us.” Nevertheless, the EU’s Michel Barnier said yesterday that “The trade deal will be associated with a fisheries agreement and a level playing field, otherwise there won’t be any agreement at all”.
In terms of now backward looking economic data out yesterday, the Conference Board’s consumer confidence reading for February came in at 130.7 (vs. 132.2 expected). While this was somewhat below expectations, the downward revisions to the previous month’s reading meant that it actually hit a 6-month high, while the expectations reading also advanced to a 7-month high of 107.8. Over in France, the INSEE’s business confidence indicator outperformed expectations, coming in at 105 in February (vs. 103 expected), the index’s highest level in 3 months.
Turning to the day ahead now. The highlights include French consumer confidence for February, January’s US new home sales and the MBA’s weekly mortgage applications. From central banks, there’ll be a number of ECB speakers, including President Lagarde, as well as Makhlouf, Panetta and Holzmann.
France Confirms 2nd Death As Outbreak Spreads Across Europe; Virus Arrives In South America: Live Updates
Update (0730ET): The UK has announced plans to start randomly testing citizens with flu-like symptoms for COVID-19. The plan is part of measures to contain the virus as the UK has managed to avoid reporting any new cases over the past week. In England, random testing will take place at 11 hospitals and 100 doctor’s offices.
“This testing will tell us whether there’s evidence of infection more widespread than we think there is. We don’t think there is at the moment,” Cosford said. He added: “The other thing it will do is, if we do get to the position of more widespread infection across the country, then it will give us early warning that that’s happening.”
So far, only 13 people have been infected.
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Update (0715ET): Abe’s government has officially denied comments made by a senior IOC member who suggested that the Tokyo Games might need to be canceled if the virus is still a threat in late May. IOC member Dick Pound told the AP that “a decision would have to be made by late May” about whether to cancel the games, according to the Washington Post.
The official position of the Japanese government is that the Games will not be canceled. Besides the obvious blowback for Japan’s already sagging economy, cancelling the games would likely have a serious psychological impact on consumer confidence in the world’s third-largest economy.
In other Japan news, Hokkaido, a prefecture in the north ofJapan, has urged schools to temporarily close as it struggles to contain the virus after a string of new cases popped up in the area. It was the prefecture’s first order to close schools since the epidemic began.
* * *
After cementing its largest two-day percentage drop in two years (going by points, it was the biggest two-day drop ever), stocks fell in Europe Wednesday as France reported its second virus-linked death (and first French national; the first was an 80-year-old Chinese tourist), while Spain confirmed 8 new cases within 24 hours.
The Frenchman who passed away on Wednesday was one of three new cases confirmed by health authorities.
Over in the US, the CDC warned yesterday that “community spread” of the virus is “inevitable,” while President Trump and his administration continued to insist that everything is fine and that the outbreak in the US would soon die down. We also saw Croatia, Austria and Switzerland report their first cases on Tuesday following the EU health commissioner’s declaration that closing borders would be “disproportionate and ineffective.”
“We’re talking about a virus that doesn’t respect borders,” said Italy’s Health Minister Roberto Speranza yesterday.
Are we the only ones who feel that this sounds like justification for closing the border?
Mirroring the situation on the Canary island of Tenerife, Austrian authorities placed a hotel in the Alpine city of Innsbruck under lockdown after a receptionist (an Italian who had recently visited outbreak epicenter Lombardy) tested positive, according to the Washington Post.
Just hours after Brazil confirmed the first case in South America, some of its continental neighbors are going on “maximum alert”. Guatemalan President Alejandro Giammattei said the country was battening down the hatches, and that its hospitals are fully stocked and supplied.
On Wednesday, Greece confirmed its first case in the city of Thessaloniki, while Iran reported 19 new deaths, bringing them, within swinging distance of the 50 deaths that a local lawmaker reported earlier this week. Confirmed cases in the revolutionary Islamic Republic have climbed to 139. According to Al Jazeera, Kuwait confirmed six more cases on Wednesday, bringing its total tally to 18. Bahrain reported three new cases, bringing its national total total to 26 as three women who recently traveled to Iran carried the virus back.
While European officials largely avoided the heavy-handed tactics used in China, government ministers urged people to avoid all “non-essential” travel as the outbreak spreads across Europe. The mystery at the center of the outbreak in Italy has compounded fears, as the lack of understanding contributes to the hysteria surrounding the outbreak.
“There is no prohibition,” said Spain’s health minister, Salvador Illa, according to El Pais. “But unless it is essential, do not go to a risk zone. It’s common sense.”
Rumors circulating around twitter yesterday claimed an official who had met with the Ayatollah only days ago had tested positive for the virus, becoming at least the second government official to catch the virus after the deputy health minister.
The Hong Kong government said it had been contacted by more than 3,000 Hong Kongers in Hubei Province, including 532 in Wuhan, asking for help getting them back to Hong Kong. In order to return to HK, the government said all Hong Kongers in Hubei must register with the government by Feb. 28.
Mongolia has become the latest neighbor to tighten its borders and restrict internal travel. The country said it would restrict travel to and from its capital, Ulaanbaatar, to other provinces until March 3. A transportation minister said the country would take precautions with other flights from Europe, Russia Turkey and Kazakhstan. Egyptair has extended its shut-down of flights to China; flights were supposed to resume on Thursday.
The Philippines, which adopted travel restrictions directed at China, said Wednesday it would also impose travel restrictions on South Korea. The government announced an immediate ban on entry to travelers from North Gyeongsang province, where the coronavirus-hit city of Daegu is located. Japan also announced that it would bar travelers who had visited Daegu or Ceongdo.
Overnight, South Korea reported 115 more cases, in keeping with its 2-3 daily updates. The new total: 1,261. That number is, of course, expected to climb over the coming days as the country begins the mass-testing of 200,000 people, including members of the cult-like church that’s found itself at the epicenter of the outbreak in Korea.
Korea also reported that an American soldier was among the 169 cases reported earlier in the day (we noted it late last night).
Israel has yet to detect the virus within its borders, but another hair-raising revelation came to light Wednesday when South Korea’s CDC confirmed that the Korean Air cabin crew infected with the coronavirus had been on a flight between Israel and Incheon.
As Shinzo Abe’s government goes all-out to keep the Olympics on track, the PM announced on Wednesday that all major sporting and cultural events in the country taking place over the next two weeks should be postponed or canceled. This comes after the International Olympic Committee said the Olympic Games would go on no matter what, even if the outbreak keeps travelers away, the Japan Times reports.
Nomura’s Call For Recession In Italy Suddenly Doesn’t Look So ‘Aggressive’
One week ago, a team of analysts at Nomura research covering the European economy made a bold prediction: Italy’s economy would enter a technical recession during Q1 as the fallout from COVID-19 reverberates across global supply chains upon which the country’s prosperous North depends.
At the time, Italy had only 3 confirmed coronavirus cases, and it appeared that the outbreak would mostly pass it by without much of a direct economic backlash. Fellow economists commiserated about this ‘aggressive’ call, and speculated about the impact that declaring a ‘technical recession’ in the eurozone’s third-largest economy might have on consumer sentiment across the Continent.
On Tuesday, that picture was looking very different. And while the call appeared aggressive a week ago, today, if anything, it might not prove weak enough.
Though the virus officially spread to the Italian South on Tuesday, it has mostly affected the affluent North, particularly the regions in the “splayed” top of the Italian ‘boot’. So far, the 100,000 Italians under army-supervised lockdown are located mostly in towns and villages. Still, the fallout For Lombardia, Veneto, Emilia Romagna and Piemonte could have serious repercussions. Veneto and Lombardia alone constitute two of the three most important provinces in terms of contribution to overall GDP.
The fact that the virus has made it to Milan is particularly alarming. The city is the 12-most densely populated in Europe, and it’s widely considered the center of Italian industry – Italy’s New York City. 2.5 million people live in Milan, and there are 10 million in Lombardia, the surrounding province.
On a QoQ basis, Italy’s economy contracted in Q4 (even if it climbed YoY). Another quarterly slide and Italy will be in what’s called a ‘technical recession’, which is precisely that – two consecutive quarters of GDP decline.
While conventional wisdom would suggest that even a few week’s worth of these broad-based shutdowns of schools and some public spaces like restaurants and sporting events would have an impact. Should the shutdowns expand to broader sectors of the economy – factories, offices etc. – then of course the backlash would be worse.
“In summary,” the team concludes, “a week ago the downward revision to our forecast for a recession in Italy had looked like a bold call. Not any more. If anything, the risks to our forecasts for Italian growth this year are now tilted firmly to the downside.”
But at this point, even the virologists are having a hard time predicting what’s going to happen next. So what hope does Wall Street have?
Pipelines convey fluids and gas within and between many countries and continents and in addition to making a profit for producers indubitably benefit those for whom the raw materials are destined. In India, for example, the most recent gas pipeline project is going to bring comfort to the neglected peoples of the north-east, as part of the grid being constructed to reach remote locations — which is expensive. So the government has stepped in with hundreds of millions of dollars to help complete the programme.
There are many other success stories about pipelines, but also some controversial instances of construction, as in Canada where some indigenous communities are objecting to a 600 km natural gas line in which some $5 billion is being invested. The benefits to Canada as a whole are potentially immense, but the Wet’suwet’en indigenous people of British Columbia are attempting to shut down the operation and have been joined by activists whose motives may not be altogether benign. These protestors have imposed a blockade of railways that has caused grave disruption to a vast number of passenger and freight services, thereby posing a serious threat to Canada’s overall economy. The protestors’ actions are in essence blackmail, and have wide-ranging effects including the inability of farmers to get their goods to domestic and international markets.
For Canada’s sake it is hoped that the difficulties will be resolved – but at least there is movement because the country’s elected government is determined to act for the people as a whole. There will always be objections to pipelines, and although Canada appears to be especially affected, the sanity of national benefit will probably prevail.
But when it comes to international benefit, notably when Russia is involved, the word sanity does not come readily to mind. Rather, the description of Washington’s moves to block the vastly important Nordstream 2 pipeline could involve such qualifiers as petulant, spiteful and malevolent.
Nordstream 2 is a series of lines intended to convey natural gas from Russia to Germany. It is a logical development stemming from the facts that Russia wants to provide gas and Germany wants to buy it, which led to a mutually acceptable agreement and commitment of many billions of dollars, largely by the firms Uniper and Wintershall of Germany, Royal Dutch Shell, Austria’s OMV and Engie of France in association with Russia’s Gazprom — an impressive example of European pragmatism. Economic benefits to both countries are potentially immense, and in addition the very existence of such a significant collaborative enterprise is an indicator that both nations recognise the advantages of cooperation and economic partnership as against the drawbacks of confrontation and antagonism.
Unfortunately, Washington has a history of preferring confrontation to economic cooperation that might benefit other countries, and has imposed sanctions on Nordstrom 2 with the aim of preventing its completion, which in normal circumstances would have taken place by now. Of the some 1200 kilometres of line underneath the Baltic Sea about 160 km remain to be laid, but for the moment construction has had to be halted.
(President Trump’s is violently against construction of the pipeline and his pronouncement that its completion will make “Germany a captive to Russia” was clear enough, but it is intriguing that at the moment, in the middle of the Nord Stream crisis, the US media reports allegations by the intelligence establishment that “Russia wants to see President Trump re-elected, viewing his administration as more favourable to the Kremlin’s interests.” If they genuinely think that Trump’s attitude to Nord Stream is supportive of Russia, then we have serious problems.)
On February 19 Germany’s economy minister, Peter Altmaier, was reported as taking a positive stance in relation to the pipeline and stating that Germany is “determined and ready” to increase trade with Russia. He made it clear that Germany is understandably opposed to the sanctions imposed by the US Congress in December 2019 and stressed that his country is going to “need more natural gas, not less” as it phases out coal-fired power production over the next years. This movement in support of a less polluted atmosphere is regarded as irrelevant, notably by US Secretary of State Pompeo who has been vocally critical of the pipeline project, which Washington claims will make Europe too dependent on Russian energy supplies.
What is not taken into account is the fact that requirement and supply do not mean vulnerability, because, by definition, bilateral commercial agreements work both ways. Russia needs the cash input from the pipeline just as much as Germany needs the gas that it conveys. There is little possibility that such a mutually beneficial, multi-billion project could be sacrificed by either side, and Trump’s statement about the pipeline has no evidential basis. It was simply another blow struck in the US campaign to split Russia from Western Europe and prevent any sort of amicable liaison, while increasing levels of confrontation by conducting military manoeuvres in the Arctic and in other locations along Russia’s borders. On February 19, for example, Deutsche Welle reported the “largest deployment of US-based forces in Europe in over 25 years,” and of course a “significant part of the troops and equipment are expected to be deployed to Poland, Latvia, Lithuania, and Estonia” — right along the Baltic Sea, where Nord Strom 2 is being built.
One of the most recent indicators of confrontation was given by Pompeo at the recent Munich Security Conference when he declared that the countries of the West “are collectively winning. We’re doing it together.” His remarks followed the opening address by Germany’s President, Frank-Walter Steinmeier, who was rather more realistic in stating that “Our closest ally, the United States of America, under the current administration, rejects the very concept of the international community. ‘Great again’ but at the expense of neighbours and partners. Thinking and acting this way hurts us all.”
It is not at all surprising that “Pompeo’s speech was met with silence from his mostly European audience” if only because most of them (but not the Baltic States) want to live in peace with Russia. Washington is encouraging confrontation, but Europe’s important countries prefer trade and cooperation, and there is little doubt that in one way or another Nord Stream 2 will be completed, probably by a Russian pipe-laying vessel currently on the way to the Baltic from the southern hemisphere.
On February 20 Jacob Hornberger of the Future of Freedom Foundation quoted the 19th century French economist Claude-Frédéric Bastiat that “When goods do not cross borders, soldiers will.” But it seems that Washington thinks that bombs or the threat of bombing will improve profitability. After all, as Forbes pointed out last year, “now the largest oil and gas producer, we will probably become the largest exporter of both within five years.”
And that’s the main reason Washington is so passionate about stopping Nordstream 2. It all comes down to profit. The military-industrial complex is determined to win.
French Car Market Slammed 18%, Adding To Global Auto Industry Meltdown
While China may have led the charge in dragging the global automotive industry deeper into recession than it already was pre-coronavirus, equally ugly numbers are starting to pop up in other parts of the world.
For instance, the French car market has fallen a staggering 18% since the beginning of the year, demonstrating that the recession is running far and deep – and this is without the impact of the coronavirus hitting France.
Nissan West Europe Managing Director Guillaume Boisseau at a press conference outside Paris on Monday: “This is very preoccupying.”
The French sales slump is being attributed to a pull forward of sales to the end of 2019 in order to skirt new emission rules, in addition to tax modifications, according to Bloomberg.
Boisseau expects the French market to be “slightly down” this year and Nissan has held firm on its goal to grow sales in France for the upcoming year after a 27% drop last year. Since the beginning of the year, Nissan sales in France are up 11%. We’ll see if those forecasts are revised as the coronavirus makes its way through Europe.
Meanwhile, one silver lining for France has been its EV market. All electric models jumped 258% in January despite the market falling 13% over the same course of time, according to CleanTechnica. Plug-in hybrid electric vehicles were up 238% over the same course of time.
Recall, just 4 days ago we wrote that Chinese auto sales had gone into “full collapse” and fell 92% for the first half of February.
China recorded 4,909 units sold in the first 16 days of the month, which is down from 59,930 in the same period last year, according to Bloomberg. If this figure doesn’t make it clear that the pandemic is having an effect outside of Hubei province in China, we’re not sure what will do it.
The China Passenger Car Association said: “Very few dealerships opened in the first weeks of February and they have had very little customer traffic.”
CPCA Secretary General Cui Dongshu said in his report: “There was barely anybody at car dealers in the first week of February as most people stayed at home.”
Zero Hedge readers should not be surprised by the February numbers. We noted that while China’s January decline was partially attributable to the coronavirus outbreak,it wasn’t until the end of January and early February when China was placed essentially on a full lockdown due to the outbreak of the virus.
How long until we start to see the same type of impact in France? We’ll be watching the country’s reported coronavirus case count very carefully.
Even as the coronavirus begins to spread around the continent, EU officials have steadfastly refuse to implement border controls, insisting that the sanctity of open borders is more important.
The number of confirmed cases in Italy has soared from 3 to 322 in the space of just five days, with 10 deaths, but authorities insist that the Schengen Area, which abolishes passport checks and border controls between 26 European states, must not be compromised.
Despite 50,000 citizens in Lombardy and Veneto being under internal lockdown, no such measures have been proposed for national borders.
Italian prime minister Giuseppe Conte has refused to implement border controls, claiming it wouldn’t help stop the containment of the virus. This prompted former interior minister Matteo Salvini to demand Conte’s resignation “if he isn’t able to defend Italy and Italians.”
“We agreed to keep borders open, closing borders would be a disproportionate and ineffective measure at this time,” Health Minister Roberto Speranza also told reporters in Rome on Tuesday.
As RT highlights, borders will remain open despite Italy now being a major source of coronavirus spreading into neighboring European countries.
“Switzerland and Austria- which border Italy to the north – also confirmed their first cases of COVID-19 on Tuesday. The Swiss patient, a 70-year-old man, had returned from an event in Milan two weeks ago. Across the Alps in Austria, a young Italian couple tested positive for the illness after entering Austria from Bergamo in Italy on Friday.”
French transport minister Jean-Baptiste Djebbari has also refused to close the border between France and Italy. Germany has likewise refused to do so.
European commissioner for health Stella Kyriakides also said borders should remain open while suggesting that the threat of “disinformation” was more of a concern.
At what point does stopping an immensely dangerous and disruptive global pandemic become more important than the sacred, never to be questioned or curtailed “international flow of people”?
Numerous nearby countries have closed their border with China yet infected Chinese citizens are still flowing into the west.
The World Health Organization, whose job it is to stop a global pandemic, has repeatedly insisted that preventing stigmatization and keeping borders open is critical, to the point where they seem more concerned about that than actually stopping the pandemic.
Now that the coronavirus is beginning to impact the global economy and interrupt supply chains, is that prioritization going to come back to haunt them?
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Paramount Halts ‘Mission: Impossible’ Filming In Venice Due To Virus Outbreak
More than 100,000 Italians in 10 villages are on lockdown in northern Italy amid new concerns the Covid-19 outbreak has spread to Europe. This prompted Paramount Pictures to halt filming of Tom Cruise’s “Mission: Impossible 7” in Venice, Italy, for the next three weeks.
Paramount announced on Monday that the Italian government had banned all public gatherings, which prevented movie production crews from filming.
“Out of an abundance of caution for the safety and well-being of our cast and crew, and efforts of the local Venetian government to halt public gatherings in response to the threat of coronavirus, we are altering the production plan for our three-week shoot in Venice, the scheduled first leg of an extensive production for ‘Mission: Impossible 7,'” the statement said.
“During this hiatus, we want to be mindful of the concerns of the crew and are allowing them to return home until production starts. We will continue to monitor this situation, and work alongside health and government officials as it evolves.”
Most of the cases have been recorded in Lombardy (200+), while Veneto, Emilia-Romagna, Piedmont, Bolzano, Trentino, and Rome have all confirmed at least one case.
Here’s a chart showing the parabolic trajectory of cases in Italy:
The emergence of Italy, Iran, South Korea, and Japan as new outbreak zones of the virus is causing new concern that a pandemic could be imminent. So far, 80,300 people in 37 countries have been infected, resulting in 2,700 deaths.
The Trump administration is preparing to ask Congress for $2.5 billion in emergency funds to fight the virus as pandemic threats continue to surge.
As we’ve previously noted – WHO’s Dr. Tedros Adhanom said during the organization’s Monday morning press briefing that the outbreak isn’t yet a real “pandemic” because the world hasn’t seen “large-scale deaths.” Yeah, okay, but just ignore all the surging cases around the world!
The economic impact of the virus on Italy’s economy could be much deeper than previously thought. As cases spread across Europe, the continent is now on recession watch.
According to Sajid Javid’s Home Office, research and findings on the characteristics of grooming gangs across the United Kingdomis not in “public interest”.
After it was found that nearly 19,000 suspected victims of child sex exploitation transpired in just one year, survivors blamed the government for making “empty promises” on ending, or even addressing, the epidemic.
In 2018, Javid claimed there would be “no no-go areas of inquiry” in regards to the rampant sex grooming of children in England.
After Javid’s statement, no further statements on the review have been made. According to The Independent, the outlet was told that the work had been finished but it would only be used for internal policy-making and would not be released publicly.
Even after a freedom of information request inquiring on the research and reports, the British Home Office said they held the information but it would not be released.
Disclosure would risk pre-empting decisions still to be made by ministers. In addition, the information could be misleading if made public and used out of context. We recognize that this topic in general and any insight and learning are matters of strong public interest, although it does not necessarily follow that it is in the public interest to disclose any specific information relating to it.
The Home Office has explained that it will soon publish a national strategy that will create a “whole system response to all forms of child sexual abuse”.
However, until the new system is made and utilized as promised, it seems that the U.K. Home Office is content on allowing the sexual abuse and grooming of children to continue unabashed.
Seeing as how the epidemic of different sex grooming gangs around the United Kingdom has been reported since 2018, it seems that the matter is not a pressing issue to British authorities. As sad as this is, it is likely a trend that will only continue, as the U.K. continues to allow itself to aid and abet criminal behavior among its refugee population.
The Nobel Peace Prize was founded in 1901 by Alfred Nobel, an arms manufacturer. His family factory first gained notoriety for producing weapons for the Crimean War of 1853-1856. Alfred Nobel invented dynamite and various other powerful explosives. These explosives were used to devastate people in conflicts such as the Spanish-American War.
After Nobel’s brother died, because of a journalistic error, the public believed that Alfred Nobel had died. In his obituary, he was portrayed as an amoral businessman who made millions of dollars off of the deaths of others. His critics declared that “the merchant of death is dead” and that Alfred Nobel “became rich by finding ways to kill more people faster than ever before.”
According to Live Science, this discovery shocked Nobel, and to improve his legacy, “one year before he died in 1896, Nobel signed his last will and testament, which set aside the majority of his vast estate to establish the five Nobel Prizes, including one awarded for the pursuit of peace.” This may very well have been a genuine act, but it is important to draw parallels between the origin of the award and its not so peaceful recipients. Here are three of the Nobel Peace Prize winners that turned out to be war criminals.
Henry Kissinger won the award in 1973 for his “efforts” to conclude the Vietnam War. What a joke. In 1968, Kissinger helped tank President Johnson’s peace talks on behalf of the Nixon campaign for political gain. Kissinger helped orchestrate the secret bombing of Cambodia. These bombing operations were known as Operation Menu and Operation Freedom Deal.
The carpet bombing of Cambodia led to the deaths of 10,000s, if not 100,000s, of Cambodian civilians. The total death count has been estimated to be as high as 500,000 (most estimates range between 150,000-300,000 deaths). The vast majority of these deaths are considered to be civilians because of the indiscriminate nature of the carpet bombing. These bombings also destabilized Cambodia and allowed for the rise of the genocidal ruler, Pol-Pot. The bombing campaign was so gratuitous that it made Congress pass the War Powers Resolution in 1973, in an attempt to curb the bombing campaign.
With all of that being said, Kissinger still won the award for his role in the Paris Peace Accords. The peace talks began in 1968, the same year that Kissinger undermined the process to win an election for Nixon. After the agreement was signed in January 1973, it lasted less than two months before full-scale war broke out again in March 1973.
After winning the award, Henry Kissinger then proceeded to indirectly back Pol Pot’s genocide in Cambodia. This was done primarily as a way to put pressure on the former North Vietnamese Army. Pol-Pot’s genocide killed between 1.5-2 million people (20%-25% of Cambodia’s population).
Henry Kissinger’s crimes are not limited to Vietnam. He has a long bloody history in Latin America as well. Kissinger was a major proponent of Operation Condor. The highly secretive US-backed campaign enabled South American dictators to kill an estimated 60,000 to 80,000 people. It also led to political imprisonments of over 400,000 people. Transcripts of telephone conversations reveal that after President Allende’s election in 1970, Kissinger began plotting a coup with CIA director Richard Helm. After the 1973 coup in Chile, Kissinger, as Secretary of State, formalized close ties between Pinochet and the United States.
For years to come, Kissinger proceeded to have close ties with the Chilean dictator, Augusto Pinochet, who killed 1000s of his political opponents and imprisoned and tortured 10,000s more. Pinochet popularized death flights: a practice where people’s stomachs were cut open before they were tossed out of planes into the ocean.
Kissinger also backed Argentina’s military dictatorship. He was buddy-buddy with Jorge Videla, a dictator who disappeared an estimated 30,000 political dissidents. Videla also tortured political opponents and their families at secret concentration camps. Kissinger encouraged all of this brutality and praised the dictatorship for stamping out “terrorism.”
Henry Kissinger’s war crimes are far too numerous to neatly fit into one article. For a better understanding of his many war crimes that I left out, I recommend reading The Trail of Henry Kissinger.
In 2009, Barack Obama was awarded the Nobel Peace Prize for his “extraordinary efforts to strengthen international diplomacy and cooperation between people.” Before digging into Obama’s war crimes, I would like to add a few caveats. Obama is not exactly like Kissinger.
On the 2008 campaign trail, Obama did claim that he would meet with adversaries without preconditions. Furthermore, he followed through on this promise in two major ways. He successfully negotiated the Iran Deal and lifted the embargo on Cuba. These are not accomplishments that should be brushed aside. That being said, Obama’s diplomatic achievements are overshadowed by his imperialist failures. I also blame most of Obama’s failures on a lack of conviction in his values and not on any Machiavellian schemes. Most of Obama’s bad foreign policy decisions can be traced back to him getting rolled by people in the military industrial complex establishment like his CIA director John O. Brennan.
Barack Obama’s most reprehensible policy was his support of the Saudi Arabian-fueled genocide in Yemen. Obama authorized mid-air refueling to refuel Saudi bombers on average twice per day and he set up a Joint Planning Cell to give Saudi intelligence and logistical support to bomb Yemen.
Obama also approved 10s of billions in arms sales to Saudi Arabia that were used to devastate Yemen’s infrastructure and throw the country into a mass famine.
In 2016 alone, Obama’s policies led to the deaths of 63,000 Yemeni children. They died from preventable causes overwhelmingly linked to malnutrition. These deaths were caused by the Saudi bombing campaign and the de-facto blockade of humanitarian aid.
For example, Saudi Arabia, with US backing, bombed the cranes at the port of Hodeidah in August 2015. 70% of all humanitarian assistance to Yemen is channeled through Hodeidah. Bombing the cranes of the major port in this area is a war crime.
In fact, humanitarian aid groups warned that the US-backed August 2015 bombings would lead to mass child death in Yemen. The Obama administration’s support and aid of these siege warfare tactics was an abhorrent moral failure. It is highly unlikely that the war in Yemen would have even been possible without US support. Neither Saudi Arabia or the UAE had the ability to wage a sustained bombing campaign without outside support from a major imperialist power like the United States.
Barack Obama also authorized Operation Timber Sycamore, the CIA train-and-equip program in Syria. The multi-billion-dollar program armed and trained fighters to topple Assad. I personally believe that the Syrian conflict is not black and white. There is a lot of blame to go around. In my opinion, both pro-Assad and anti-Assad writers do not tell the entire complex story. Over half a dozen countries helped fuel the proxy war for different reasons, and Assad himself is not simply a victim of Western imperialism.
Those caveats aside, it is very clear that Timber Sycamore was a terrible idea that led to textbook mutual escalation that broke open the Syrian conflict further and might well be the reason that 100,000s more Syrians died. Billions of dollars were poured into “vetted” rebel groups. Many of these groups turned out to be Salafi jihadist groups and Muslim Brotherhood-linked groups that carried out ethnic murder and various other war crimes.
Among these groups that received either training or weapons were Ahrar al Sham, Jaysh al Islam, and Nour al-Din al-Zenki, all of whom have been accused of war crimes as per Amnesty International. The massive delivery of BGM-71 TOWs via Timber Sycamore is also sometimes cited (in my opinion correctly) as the policy that caused Russia to intervene in Syria. This is the aforementioned textbook case of mutual escalation.
Obama also set up a worldwide drone program that Noam Chomsky called “the most extreme terrorist campaign of modern times.” A study done in Afghanistan over a six-month period found that 90% of people killed in US drone strikes were not the intended targets. The Bureau of Investigative Journalism is one resource that has documented the high civilian casualty rate that occurred under Obama’s drone program (and continued and oftentimes increased under Trump’s administration).
AUNG SAN SUU KYI
Aung San Suu Kyi won the Nobel Peace Prize in 1991 for “her nonviolent struggle for democracy and human rights.” She is currently the State Counsellor (equivalent of prime minister) of Myanmar. State Counsellor Suu Kyi just oversaw one of the largest violent ethnic cleansing projects of the 21st century. It turns out that she fought for human rights and democracy…unless you are a Rohingya Muslim.
The crackdown on the Rohingya that Suu Kyi oversaw led to a conservative death toll of 10,000 Rohingya. The Myanmar military burned children alive and raped 1000s of Rohingya women. Since 2015, over 900,000 Rohingya have had to flee from Myanmar, mostly into neighboring Bangladesh.
There have been claims that the ethnic cleansing project may have been a response to violent Rohingya extremist groups that operated in the Rakhine State area of Myanmar. I find this to be plausible given the history of oppression that Rohingya faced and their subsequent insurrections dating back over a half a century.
However, this certainly does not excuse hacking Rohingya civilians to death with machetes (similar to what the Hutus did to the Tutsis in the Rwandan genocide)
State Counsellor Suu Kyi denied that an ethnic cleansing project was taking place and she backed the military crackdown. She gave cover for the war criminals in her military by stating “there have been allegations and counter-allegations…We have to listen to all of them.”
Suu Kyi proceeded to be the figurehead that attacked the International Criminal Court investigations into Myanmar’s ethnic cleansing project as “not in accordance with international law.” She proceeded to run interference for her military’s war crimes at the UN.
To be clear, as I alluded to above, not all Rohingya are innocent in the conflict. There are credible reports that tie some of the more extremist groups in Rakhine State to outside Saudi funding. But it is a false equivalency used by ethnic cleansing apologists to conflate all the Rohingya in Myanmar with Al Qaeda. Buddhist nationalists used the (likely) correct allegation that worldwide terrorism sponsor Saudi Arabia was funding a couple of Rohingya groups as an excuse to ethnically cleanse an entire population that is mostly peaceful.
It’s very simple. The Nobel Peace Prize is just like most other awards. Sometimes its distributors get it right and sometimes they get it wrong. The people that win awards do not win them based off of objective score cards about morality. They win these awards based off of media narratives.
When the Nobel Peace Prize awarded Martin Luther King Jr. with the award, they got it right. When they awarded Henry Kissinger with the award, they exposed themselves to be clowns of the highest order. Do not take awards like the Nobel Peace Prize seriously. They are popularity contests, where oftentimes those that are popular are actually in favor of abhorrent policies.
America’s Newest Most Powerful Submarine Has A Stealth Problem
The Navy’s newest fast-attack submarine was recently spotted with structural damage to its stealth coating after returning from its first deployment, which brings into question the manufacturing process of the shipbuilder, reported Forbes.
The USS Colorado (SSN 788), a nuclear-powered US Navy Virginia-class attack submarine, was recently photographed with large sections of its stealth coating, known as anechoic coating, missing on its starboard side. The layer is an outer skin, consisting of a sonar-absorbing material that makes the vessel virtually undetectable.
Colorado was launched on March 17, 2018, and this is one of America’s newest and most powerful submarines, already experiencing issues with its outer stealth coating that could make it susceptible to detection by enemy forces.
The vessel recently returned from deployment in harsh northern waters, traveling approximately 39,000 nautical miles.
Forbes notes that the US, British, and Russian navies have all had similar problems with stealth skin breaking off during deployments.
However, Colorado experienced structural damage to its stealth coating on its first deployment, opening up questions surrounding the shipbuilder’s manufacturing process.
One thing we’ve learned from the Trump Presidency is that the “deep state” is not just some crazy conspiracy theory. For the past three years we’ve seen that deep state launch plot after plot to overturn the election.
It all started with former CIA director John Brennan’s phony “Intelligence Assessment” of Russian involvement in the 2016 election. It was claimed that all 17 US intelligence agencies agreed that Putin put Trump in office, but we found out later that the report was cooked up by a handful of Brennan’s hand-picked agents.
Donald Trump upset the Washington apple cart as presidential candidate and in so doing he set elements of the deep state in motion against him.
One of the things candidate Donald Trump did to paint a deep state target on his back was his repeated praise of Wikileaks, the pro-transparency media organization headed up by Australian journalist Julian Assange. More than 100 times candidate Trump said “I love Wikileaks” on the campaign trail.
Trump loved it when Wikileaks exposed the criminality of Hillary Clinton and the Democratic Party, as it cheated to deprive Bernie Sanders of the Democratic Party nomination. Wikileaks’ release of the DNC emails exposed the deep corruption at the heart of US politics, and as a candidate Trump loved the transparency.
Then Trump got elected.
The real tragedy of the Trump presidency is nowhere better demonstrated than in Trump’s 180 degree turn away from Wikileaks and its founder Julian Assange. “I know nothing about Wikileaks,” he said as president. “It’s really not my thing.”
Donald Trump is trying to “make an example” of Julian Assange, the WikiLeaks founder’s defense team argued Monday at the start of his extradition hearing https://t.co/wVgjWyl9y1
US pressure and bribes to the Ecuadorian government ended Assange’s asylum and his seven years in a room at the Ecuadorian embassy in London. After his dramatic arrest by London’s Metropolitan Police last April, he has been effectively tortured in British jails at the behest of the US deep state.
Starting Monday the 24th of February, Assange faces an extradition hearing in a UK courthouse. The Trump Administration – led by a man who praised Assange’s work – seeks a show trial of Assange worthy of the worst of the Soviet era. The US is seeking a 175 year prison sentence.
The Trump Administration argues that the Australian Assange should be tried and convicted of espionage against a country of which he is not a citizen. At the same time the Trump Administration argues that the First Amendment does not apply to Assange because he is not an American citizen! So Assange is subject to US law when it comes to publishing information embarrassing to the US deep state but he is not subject to the law of the land – the US Constitution – which protects all journalists and is the backbone of our system of government.
It is ironic that a President Trump who has been victim of so much deep state meddling has done the deep state’s bidding when it comes to Assange and Wikileaks. President Trump should preempt the inevitable US show trial of Assange by granting the journalist blanket pardon under the First Amendment of the United States Constitution.
The deep state Trump is serving by persecuting Assange is the same deep state that continues to plot Trump’s own ouster. Free Assange!
Secretive Cult Linked To Coronavirus Outbreak In South Korea Held Meetings In Wuhan
Following reports that a strange Christian cult might be behind the outbreak in Daegu that kickstarted South Korea’s COVID-19 crisis, readers around the world have been curious to learn more details about the Shincheonji Church of Jesus, the small but surprisingly extensive church that follows a man named Lee Man-hee who claims to be the second coming of Jesus Christ.
Americans will recognize this as a similar concept to the Mormon theology. In South Korea, it’s one of several high-profile Christian cults with a doomsday-oriented philosophy (the leader of the Shincheonji will allegedly take thousands of followers with him to heaven when the world ends).
But in China, a cult like this is extremely illegal. Yet, somehow, in a state that’s constitutionally athiest, cults like this survive and sometimes flourish as it’s one of the few options that ordinary people have to do something genuinely subversive.
Churches like Shincheonji survive in a sort of tense standoff with the government, with scrutiny coming in waves. Typically, any kind of high profile attention would be bad for the church because it would rouse the authorities. In which case, the story that we’re about to share will likely be very, very bad for the church. But unfortunately for them the cat is already out of the bag.
he South China Morning Post has learned that the Shincheonji Church of Jesus has a branch in Wuhan, the Chinese city at the epicenter of the COVID-19 outbreak that is rocking the world right now.
And the paper has it on good authority that the church’s ~200 members in the city, most of whom are now in quarantine outside Wuhan, continued meeting even after the outbreak started to pick up steam.
One alleged member, who spoke under condition of anonymity, said in the beginning, nobody took the virus seriously – because authorities said it wasn’t serious.
“Rumours about a virus began to circulate in November but no one took them seriously,” said one member, a 28-year-old kindergarten teacher.
“I was in Wuhan in December when our church suspended all gatherings as soon as we learned about [the coronavirus],” said the woman, who declined to be named because of the sensitivity of the matter.
As of Tuesday evening in the US, there were 977 confirmed cases in South Korea, the highest number outside China, as well as 11 deaths. Of the 84 new cases reported on Tuesday, more than half were reported in Daegu.
A pastor in Hubei province who spoke with SCMP said that Shincheonji church members were especially dedicated, and probably continued their missions to recruit during the outbreak.
Another alleged member of the church, identified only as a kingergarten teacher in Wuhan, said she was sure the church in Wuhan had nothing to do with the outbreaks in South Korea.
The Wuhan kindergarten teacher said she was confident that the recent mass outbreaks in South Korea were not linked to Shincheonji church members from the city.
“I don’t think the virus came from us because none of our brothers and sisters in Wuhan have been infected. I don’t know about members in other places but at least we are clean. None of us have reported sick,” she said.
“There are so many Chinese travelling to South Korea, it’s quite unfair to pin [the disease] on us.”
However, she can’t prove this.
She sidestepped questions on whether church members had travelled from Wuhan to South Korea after the outbreak.
A spokesman for the church told SCMP that the group has had troubles with the Chinese authorities before, and that they would do anything to avoid any undue scrutiny connected to the virus, which they stressed had nothing to do with the church.
The teacher said that in 2018 the Wuhan group’s “holy temple” in Hankou district had been raided by police “who branded us a cult,” but members continued to worship in small groups.
“We are aware of all the negative reporting out there after the outbreak in South Korea, but we do not want to defend ourselves in public because that will create trouble with the government,” she said. “We just want to get through the crisis first.”
We wonder if Chinese authorities will see things the same way?
“If Hillary gave up one of her balls and gave it to Obama, he’d have two.”
“Well, you know, James Carville is well-known for spouting off his mouth without always knowing what he’s talking about. And I intend to stay focused on fighting for the American people because what they don’t need is 20 more years of performance art on television. And that’s what James Carville and a lot of those folks are expert at … a lot of talk and not getting things done for the American people.”
This is what they’ve got? James freaking Carville?
Yes, twelve years after he mismanaged Hillary Clinton’s campaign into a thoroughly delightful but stunningly unlikely defeat, James freaking Carville is the best footsoldier that MSNBC can muster up in the tireless (and tiresome) war they are fighting against Bernie Sanders, against the will of the voters, and against any chance of progressive change in our lifetimes.
I have no idea how—-or even if—-James Carville is still alive. He seems to be permanently coated in the death-spray of a female praying mantis, some corrosive fluid that’s permeated his brain and turns him more bitter by the millisecond; as you watch him writhe around in his seat among the standard MSBNC crew of failed Democratic Party apparatchiks, Chris Matthews-type mental cases, and ex-CIA bosses with weak-ass gravitas, he seems even more disturbed than the rest of the panel; it seems like he’s about to start consuming his own flesh, live, on national TV.
(Now, I think I speak for a sizable portion of the American public, of all political stripes, on this one: I wish James Carville hadn’t forced me to consider the issue of Hillary Clinton’s balls. It’s, um, distasteful. But when you delve into Carville’s quotes, you discover that they’re nearly ALL distasteful. While proudly fighting to break that glass ceiling and elect the first female president, for example, he said of Pamela Jones—-one of the women sexually assaulted by Bill Clinton—-“this is what you get when you drag a $100 bill through a trailer park.” The guy seems to have some deep psychosexual issues.)
The fact that MSBNC is already so desperate to kill the Sanders’ candidacy in its cradle that they’re willing to exhume poor James Carville, dress him up in his least filthy rugby shirt, stick a baseball cap over his skull to keep the children from shrieking, and prop him up to babble at Joy Reid is one more signal that the fix is in. As if we needed it: for months, MSNBC hacks have been saying that Sanders is a Russian plant, an idiot, someone only “racist liberal whites” and “misfit black girls” could like, and-—when all else fails, simply a guy (Jew?) who “makes my flesh crawl.”
Lets’ spare ourselves months of these subtle, rapier-like rhetorical thrusts and cut, as they say, to the chase: the Democratic Party, with James Carville serving as just one of their low-rent Paul Reveres, is screaming out a warning: it doesn’t matter if Bernie Sanders sweeps all, or most, of the remaining primaries, as he seems certain to do. It doesn’t matter what the plurality of Democrats actually wants: their hopes, their passions, their dreams mean nothing.
They’re simply not going to let him win.
Bloomberg, Biden, god help us Klobuchar, the reanimated corpse of Hubert Humphrey: God knows what human form the Party will assume, but it won’t be Bernie Sanders.
So I find myself wondering how those voters will respond to the brazen theft that we’re about to witness. “What happens to a dream deferred?” asked the poet Langston Hughes. How will the young people of America—-the idealistic anti-Carvilles among us-—react on that day, when they see the last pretense of American democracy stripped away to reveal the huge and reeking meat factory that’s owned and operated by the Mike Bloombergs of this world? What about the older ones among us, lying dormant in cynicism for decades, who’ve dared to awaken to at least a flicker of hope?
Will this blatant death-blow to democracy send us, at last, into the streets? Will we finally rain hell down on these monsters?
“Maybe it just sags, like a heavy load,” wrote Hughes, speaking of that dream deferred.
And that would be the most heartbreaking of outcomes…the outcome that James Carville, and Hillary Clinton, and Chris Matthews, and Joy Reid, and the CIA, and Wall Street, are all calmly expecting, as they lie back, smiling in the absolute certitude that they’re always right…
Hong Kong Embraces Helicopter Money – Govt Gives Every Adult Citizen HK$10,000
Hong Kong just went full monetary-policy retard.
In a desperate effort to “do something” about the economic collapse that the region is suffering…
Hong Kong’s Financial Secretary Paul Chan Mo-po is set to unveil a HK120 billion relief deal which includes ‘helicopter money’ – giving every Hong Kong permanent resident over the age of 18 a cash handout of HK$10,000 (around US$1,300) to, reportedly, ease the burden on individuals and companies.
As SCMP reports, Chan has been under intense pressure from lawmakers to dose out a heavier aid to help the city ride out of the economic slump – battered by the coronavirus epidemic and months of anti-government protests, sparked by the now-withdrawn extradition bill.
Hong Kong is suffering an unprecedented slump in consumption, with retail sales having collapsed…
And as we detailed recently, Sun Hung Kai Properties, which is among Hong Kong’s largest mall owners, said on Wednesday it would reduce February rent by up to 50% for most of its tenants, in an effort to stabilize economy and protect employment.
“The Hong Kong government should avoid the temptation to increase taxes or cut expenditures at a time when the city should in fact protect and even step up its domestic support programs,” said John Timpany, partner and head of tax in Hong Kong at KPMG China.
KPMG went on to propose a series of short and long-term spending measures, including:
Giving out HK$10,000 electronic consumption vouchers to permanent residents age 18 and older to promote spending at local businesses.
Tax relief measures for local businesses such as deferred payments and partial waivers of provisional tax.
Extending rent subsidies for Hong Kong Science Park, Cyberport and other public institutions for six to 12 months.
Support to working parents as well as allowance on rental expenses for residences.
Boost Hong Kong’s long-term competitiveness by adopting bolder tax incentives and lower rates to attract overseas business.
“The reserves are meant to prepare Hong Kong for rainy days, and we should use it timely and wisely to weather the storm we are in now,” said Alice Leung, a partner for corporate tax advisory at KPMG China.
But, the money-drop wasfirst suggested back in December, when the the pro-business Liberal Party proposed that the Hong Kong government should give cash or vouchers to each adult permanent resident in order to stimulate local consumption.
Last Friday, pan-democrats tabled a non-binding motion in Legco urging the government to include a HK$10,000 cash handout in its HK$30 billion aid package.
The motion was voted down by Chow and other pro-government lawmakers who said it would delay passage of the funding application for the package.
And as recently as Sunday, Chan said in a blog post:
“The government’s resources are finite, it is impossible for this budget to completely satisfy demands from everyone.”
But, it seems Chan was able to see past that ‘finite-ness’ and the virus scare was just the right crisis not to waste and will dip into the government’s large fiscal reserves of about HK$1.1 trillion to help the city ride out the economic slump.
The handout will cost HK$71 billion and benefit around 7 million people:
“I have to emphasise that, although the cash payout scheme involves a huge sum of public money, it is an exceptional measure taken in light of the current unique circumstances and will not, therefore, impose a burden on our long-term fiscal position.”
Notably, Bloomberg’s Iain Marlow points out that Chan noted he needs to get the approval of the Legislative Council for the “exceptional” cash handout.
Given that LegCo has been paralyzed as a result of opposition filibustering, I wonder whether it will be delayed or stopped – or whether the pro-democracy camp in Hong Kong will think standing in the way of a cash handout at this time would be political suicide.
However, Chan says Hong Kong’s economic growth this year will be between negative 1.5 per cent and positive 0.5 per cent.
“It is hard to be optimistic on this year,” Chan says.
If the city’s economy contracts this year, it would mean gross domestic product has shrunk two years in a row, something which has not happened since Hong Kong’s return to Chinese rule in 1997.
So Hong Kong is about to unleash the mother of all stagflations on its people – who were already on the brink of massive social unrest before the virus forced lockdowns. Supply chains have collapsed, therefore there is no supply of goods or services, but demand is about to soar (thanks to free money drops from the government)…What happens to prices we wonder?
The US corporate media, who had such a long run as relative monopolizers of truth, have been discrediting themselves in serial fashion since 9/11. Their lapdoggery to the Bush regime backfired on them during the WMD lie operation and the resulting war of aggression. Then came their participation in the fraudulent business reporting leading up to the 2007-2009 Wall Street crash, and their big lies afterward that “no one could have imagined.” The next big rupture arrived in 2015-2016, their million-minutes spent on preemptive coronations of Trump as one candidate and Clinton as the other, and their responsibility for the unexpected result, which they have tried ever since to blame daily on a vague, ever-present “Russia.”
In the last few years, it is true that a few million mostly well-meaning people have partaken in the fandom and breaking-news rituals of the Extended Maddowverse. A similar number have bought into the sorry fantasies of Murdochworld, in which a heroic manly Trump is always about to drain the swamp that spawned him. These groups are like the devoted audiences of Game of Thrones or Star Wars, but smaller. Of course it’s a far more serious matter, because they don’t distinguish between their favorite shows and reality, and they are politically influential people, relatively speaking. A third minority, meanwhile, also small if growing, reject both sides of the #Russiagate coin.
Meanwhile 90-95% of everyone else in this country just aren’t following it, don’t know, don’t care. The QAnon Volk call them sheeple, and the committed Hamiltonian liberals of the Russia-Ukrainegate priesthood want to condemn these vulgar Americans for their supposed toleration of Trump’s constitutional outrages. (The latter are the ones who assured that toleration, when they cheered on a ridiculously narrow impeachment, one bound to lose and based on the least atrocious of Trump’s many crimes, and proclaimed that “all roads lead to Russia.”)
But it’s okay. It is okay that most working people are worried about work and wages and health care and debt, and bills and university and maybe ending the endless wars, and don’t have a fucking clue who Oleg Deripaska or Lev Parnas are. Those people have their priorities straight. Or, at least, their priorities are set more by the realities of having to get by and make a living, and perhaps just a little bit less by flickering shadows on a cave wall.
In short, the more the corporate media and the mercenary-intellectual complexes (of private “think tanks” and “analysts”) continue to act openly as adjuncts of the alphabet-agencies and assert the hegemony of the new #Russiagate creed (or its flipside, on Fox and Co), the less they are believed.
The more exposed they are.
This is a big story: the decline of the corporate media’s power to persuade, an upheaval in what Guy Debord described as the Society of the Spectacle. It is why these outlets have become so fervent in condemning social media, as if people sharing bullshit on Facebook — problematic as it can be, although it should be noted that most of this bullshit is also corporate media product — is somehow inherently more pernicious than the activities of the cable news networks and the pronouncements of their “unnamed sources” at the blood-drenched State Department, Pentagon and natsec agencies.
The corporate media have effectively joined the campaigns calling for Internet censorship. I don’t know if that will work, given the confluence of crises, the way all the inevitable disasters of capitalism, its wars and its ecocides might allow for sudden new repressive measures. But the corporate media’s credibility keeps setting new lows, and they keep grasping for the same increasingly blunted instrument of blaming the All-American shitshow on Russia. This week, apparently, Russia is why Sanders is winning.
Mapping Coronavirus In The Middle East: 9 Countries Hit As Alarm Raised Over Vulnerable Refugee Camps
Unprepared countries across the Middle East are scrambling to respond as they’ve begun recording more and more coronavirus cases.
While official government figures across the region likely fall short of the true number— for example hard hit Iran may have already seen 50 deaths according to one lawmaker in the city of Qom despite the Health Ministry denying this high figure and confirming only 12 deaths to date — it’s deeply alarming that Covid-19 has been confirmed in multiple corners of the Middle East, from Egypt to the Gulf to Iran.
Notice also that the United Arab Emirates now has at least 13 confirmed cases,in a worrisome sign in could hit the gulf region hard, given also it’s a major international transport hub straddling east Asia and the West.
The WHO is especially concerned of an outbreak among refugee populations in war-torn regions of Iraq and Syria.
“Refugees and internally displaced populations across Iraq and Syria have been identified as the most vulnerable groups in the region, should the spread of the virus become a pandemic,”The Guardian reports of recent statements.
“Health officials in both countries remain under-equipped to deal with such a a reality that seems more possible with each passing day,” the report added.
Sprawling and densely packed “tent cities” of refugees along the border areas of Syria remain the most vulnerable.
Official government numbers of infected in the region are as follows:
Bahrain (17 cases)
Egypt (1 case)
Iran (61 cases)
Iraq (5 cases)
Israel (2 cases)
Kuwait (3 cases)
Lebanon (1 case)
Oman (4 cases)
UAE (13 cases)
Meet #Iran’s Deputy Health minister Iraj Harirchi. The one profusely sweating, wiping his face in conference. Turns out, he is infected with #Corona.
No definitive # from Iran but hundreds suspected, a lawmaker put deaths at 50. Harichi got quarantined: pic.twitter.com/YZm9QdWvbI
An Israeli woman tested positive for the virus after returning from a heavily affected cruise ship, Israel announced on 21 February.
The country later sent 180 South Korean tourists back home and closed travel to and from South Korea. According to Israeli media, the government is considering quarantining another 200 South Koreans at a military base.
Kuwait (3 cases)
The Kuwaiti health ministry reported its first cases of coronavirus on 24 February.
In a statement posted on Twitter, the ministry said: “Tests conducted on those coming from the Iranian holy city of Mashhad showed there were three confirmed cases of the coronavirus (COVID-19).”…
Lebanon (1 case)
The first confirmed case in Lebanon involved a 45-year-old woman who had travelled from Iran and was quarantined.
She had arrived on a plane from the Iranian city of Qom, where authorities have said Iran’s outbreak started.
Oman (4 cases)
Oman reported two more cases of coronavirus from individuals who had just travelled to Iran, according to the country’s health ministry Twitter account.
The health ministry reported the first two cases of coronavirus infections in the country on 24 February, Oman TV said.
The two Omani women diagnosed with the illness had visited Iran, it said. They are in a stable condition…
UAE (13 cases)
The UAE banned all travel to Iran and Thailand over fears about the spread of the virus, state news agency WAM reported on 24 February.
It recorded the first of its 13 cases when four members of a Chinese family were diagnosed on 28 January.
International banks are suspending credit lines for some independent oil refiners worried about the growing risk of defaults across industries because of the coronavirus epidemic, Reuters reports, citing industry sources.
According to the sources, at least three private refiners, or teapots, have had credit lines to the tune of $600 million suspended by banks including French Natixis, Dutch ING, and Singapore DBS Group Holdings.
“All our applications for new open-account credits are frozen … these clean credits are pivotal as we buy 6 to 8 million barrels of oil each month,” one source told Reuters.
Refiners, both private and state, have already reduced their run rates in response to the slump in fuel demand resulting from the outbreak, and now they have deepened these cuts, Bloomberg reported last week.
The average as of last Thursday was about 10 million bpd, down by 25 percent on the same time last year, when the average run rates were at a record high of close to 13 million bpd. Analysts expect the low run rates to continue at least until the end of this month, but if it spills into March, some refiners – notably independent refiners – will start experiencing a lack of storage space, too, after earlier this month they took advantage of low prices to stock up on crude.
Now, on top of that, the teapots that have accounted for a large portion of China’s increased thirst for oil that was instrumental in oil price recovery after the crisis, are having financing trouble.
“We were told by our banks that so long as the open-account credits are for oil heading to Shandong, it will be very hard chance winning approvals,” another Reuters source said.
The three refiners refused credit line extensions have combined oil import quotas of about 240,000 bpd, Reuters reports. If more banks become wary of defaults among refiners, this could hit imports over a longer term.