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The Massive Asset Bubbles That Ultra-Loose Monetary Policy Has Already Bestowed Upon Us

A weekend topic starting with Yahoo Finance. “The Federal Reserve slashed interest rates by half a percentage point last week, citing a need to protect small- to medium-sized businesses from the economic ripple effects of the coronavirus. But a Seattle-based regional bank doubts that lower interest rates will build confidence in a community grappling with its own coronavirus outbreak. In the suburb of Kirkland, Washington, an outbreak at a nursing facility led to 10 deaths alone. WaFd Bank operates a branch a mile away from the Life Care Center, and WaFd CEO Brent Beardall says the rate cut gives ‘credence to the kind of panic’ reminiscent of 2008.”

“‘The reality is, there was no crunch on credit where credit wasn’t available last week before the Fed cut,’ Beardall told Yahoo Finance. ‘Businesses in Kirkland that needed lending capacity, it was there and available to them. And today it’s a little bit cheaper but what does 50 basis points really do? I’m not sure it does that much.'”

“‘My biggest fear is, because of the perception that everybody needs to grind to a halt, we will essentially talk ourselves into a recession,’ Beardall said. ‘People will stop going out to eat, people will stop traveling and everything and then it becomes a self-fulfilling prophecy.'”

The Reno Gazette Journal in Nevada. “When an event like the coronavirus outbreak dissuades a large number people from flying to Las Vegas, occupancy rates in hotels along the Strip drop. ‘We’re talking about a service industry where labor is a big portion of the daily cost for these companies, and when there’s irregular demand, there’s nothing you can do on the cost side,’ said Chad Beynon, a gaming analyst with Macquarie Securities. ‘Employees are still getting paid. They’re still working, so you just burn cash. That’s the scary thing.'”

“The financial collapse between 2007 and 2009 caused unprecedented disruptions in consumption-related industries. During that time, MGM Resorts’ stock price dropped from $99.75 a share to $1.89 a share. Visitor volume dropped by almost 3 million. Nevada’s unemployment rate hit 11.8 percent – and more than 19,000 workers in the hospitality business lost their jobs.”

“Anthony Curtis has been tracking the feelings of tourists on the Strip since the 1980s. ‘People are completely bonkers nervous about this,’ said Curtis, who often stops in bars on his way home. On a trip this week, the bars were empty. ‘I stopped at three bars. Each had one or two patrons. I talked to the bartenders and asked, ‘Is this what’s going on here?’ Nobody’s sure.'”

The Times of London. “The scene was straight out of a Hollywood disaster film. A coastguard helicopter hovered over a cruise ship bobbing in the Pacific, barred from docking amid fears that the killer virus on board would spread to land. The chopper dropped a cache of testing kits and then peeled away, leaving 3,500 passengers and crew unsure when they would be allowed to rejoin civilisation.”

“This happened on Thursday when officials quarantined the Grand Princess off the California coast in the hope of containing the coronavirus. Despite San Francisco’s efforts, the virus arrived in the unofficial capital of the tech industry anyway. Companies have told workers to stay at home. Schools have been closed. About 800 miles up the coast in Seattle, where the first case in America was reported, a similar lockdown was enforced.”

“Sequoia Capital, the venture capitalist famed for backing Google, warned its portfolio companies to cut costs and prepare for the worst: ‘Coronavirus is the black swan of 2020.'”

The Houston Chronicle in Texas. “The new coronavirus is the latest international shock to hit the local economy. Scott Stearns, director of supply chain for MacroFab, an electronics manufacturer and manufacturing platform in Houston, said the difficulty in getting components from its supplier in China has more than doubled the time it takes for his company to assemble and ship printed circuit boards to customers such as Apple and Google, raising costs, lowering volumes and cutting sales. Executives estimate that revenues could fall 30 percent in the first three months of the year.”

“‘I’m just learning the tariffs, trying to incorporate that into our pricing model to make sure we’re not eating it, and then boom, this comes in,’ Stearns said. ‘It’s been very painful.'”

“China’s demand for crude has slipped by 1 million to 3 million barrels per day, according to various estimates, as analysts downgrade oil consumption forecasts. Global oil demand fell by nearly 5 million barrels a day in February, according to the Norwegian consultancy Rystad Energy. Oil prices, which are down more than 30 percent since the beginning of the year, settled below $42 a barrel.”

“Oil and gas companies in Texas are particularly exposed to the oil price drop, economists said, since many were already struggling to fund planned investments in 2020. Many have bet heavily on shale in West Texas, a play that needs a constant flow of capital to keep drilling as wells deplete. ‘It’s a big demand shock for oil consumption,’ said Jesse Thompson, an economist at the Dallas Fed. ‘At that price point, there are some (exploration and production) companies that are not going to be able to make their break-even. That could translate in Houston to job (cuts).'”

The Wall Street Journal on China. “A sharp economic slowdown in China caused by the coronavirus epidemic is putting new pressure on the country’s labor market, as businesses struggling to maintain or revive operations resort to pay cuts and layoffs—or simply shut down. Jim Huang, chief executive of China-America Commodity Data Analytics, a consulting firm, said he had no choice but to lay off 18 of his 20 employees in Wuhan after it became impossible to run his business in the hard-hit city because of a government quarantine there.”

“Many of his employees were in other parts of China when the lockdown started and couldn’t return, he said, making it difficult to serve clients and keep cash coming in. ‘I believe we have already entered into a recession’ in China, he said.”

The Daily Telegraph in Australia. “Buyers face a dilemma as house prices are poised for another year of whirlwind rises — get in now or wait and see if the coronavirus will slam the brakes on the market. Economic modelling showed the median price of a Harbour City home was expected to finish the year another 10 per cent higher, due to the recent spate of interest rate cuts and historically cheap credit. But experts have warned the coronavirus could wreck those predictions if people were too scared to attend open houses and auctions.”

“Housing experts said the cheap credit environment was ‘super juice’ for the market and prices had increased by an average of 12.7 per cent since the first of the four RBA cuts in June. Before the rate cuts, the Sydney median price dropped about 15 per cent between mid-2017 and mid-2019, CoreLogic data showed. There were also isolated pockets around the city where vendors were offering higher discounts and properties were taking longer to sell, suggesting buyers had more negotiating power.”

“Houses in the inner west suburb of Five Dock were down about 9 per cent from a year ago and took an average of nearly three months to sell. They typically changed hands at prices 10 per cent lower than advertised, REA Group data showed. There was a similar environment in St George enclave Blakehurst, where vendor discounts averaged 8 per cent.”

From Macleans on Canada. “Not all superheroes wear capes. In Canada they carry loan applications and have wallets stuffed with credit cards. When the Great Recession hit more than a decade ago, shoppers and homebuyers eagerly heeded the Bank of Canada’s emergency interest rate signal and carried the economy through the crisis relatively unscathed. Then came the sequel in 2015 — as tumbling oil prices threatened economic chaos, the bank again summoned Canada’s bruised and battered households to unleash their power of debt accumulation to vanquish yet another downturn.”

“This past week Bank of Canada Governor Stephen Poloz released his script for saving the economy from coronavirus, and like a tired trilogy that keeps rehashing the same exhausted plot line, households are expected to play the role of economy-savers for the third time in 12 years. But if we’ve learned anything from the first two instalments of this gruelling spectacle, it’s that they always seem to end with a glaringly obvious twist — out of control house prices and dangerously over-extended households.”

“On March 4 the bank cut its overnight target rate by half a percent to 1.25 per cent. That was the first cut since 2015, and by making such a large move — rate cuts are typically done 0.25 per cent at a time — it was meant to get our hero’s attention. The latest call to spend comes as households were showing signs of making the painful adjustment from their previous debt binges. Insolvencies, specifically consumer proposals, have been increasing at the fastest pace since the Great Recession.”

“At the same time the annual growth in consumer credit has slowed from 5.6 per cent in 2017 to just 2.4 per cent in January. That reduced borrowing had sapped consumer appetites for everything from home furnishings and clothing to new vehicles and electronics. Instead, with Canada’s economy already more dependent on indebted households than at any time since at least the 1960s, and with the economy facing headwinds from the recent rail blockades and uncertainty over the spread of coronavirus, the hope is that cheap money will keep consumers spending and that households can bail out the economy yet again.”

“That’s not exactly how Poloz has framed the bank’s rate cut, of course. He did warn that the plunge in oil prices to their lowest level since 2016 could spread throughout the rest of the economy as those directly affected ‘spend less money on everything.'”

“‘The downside risks to the economy today are more than sufficient to outweigh our continuing concern about financial vulnerabilities,’ he said, using central banker speak for the state of Canada’s overextended households and the risk they pose to the financial system. He also brushed away concerns that Canadians in some real estate markets will do what they have done every other time rates have been cut — drive expectations of home prices higher and stretch their finances dangerously thin to avoid missing out on the gains. ‘Declining consumer confidence would naturally lead to reduced activity in the housing market,’ he said in his speech. ‘In this context, lower interest rates will actually help to stabilize the housing market, rather than contribute to froth.'”

“In other words, Poloz is betting house prices are about to fall, and the action he’s taking now is meant to prevent those declines. From the perspective of encouraging more affordability for first-time buyers, that’s an odd strategy, but these are odd times. Today Canadian households are carrying more than $2.9 trillion in consumer and mortgage debt, nearly double their debt load before the Great Recession hit, which makes every cut that much more powerful. It’s entirely possible that we come out of the next few months with both a battered economy as well as higher house prices and even more indebted households. A superheroes work, it seems, is never done.”

From George Schultze at Forbes. “When I studied economics at Rutgers College and then at Columbia University’s Graduate School of Business, it was a serious, some might even say boring, subject. The most important macroeconomic debates at the time centered on whether monetary or fiscal policy was the better tool for managing an economy. There were disagreements among the top thinkers to be sure, but everyone agreed on the fundamental principles. That’s not necessarily the case anymore. Certainly not when Modern Monetary Theory (MMT) comes into play. “

“The proponents of MMT, such as Bernie Sanders’ economic advisor Stephanie Kelton, say that self-imposed limits on fiscal spending in the US are holding back economic growth and frustratingly limiting sorely-needed inflation. They advise that the government should therefore just print another $500 BN of new money to pay for things. However, MMT proponents fail to acknowledge that this path is a slippery slope and the same one that’s caused many other economies to topple when investors lose confidence.”

“In their rush to come up with a new and better theory for managing today’s ‘modern’ economy, they omit consideration of whether old statistical measures (like CPI) should also be revamped. If they had, they would have to concede that a more modern measure of prices for managing an economy should incorporate the measurement of asset bubbles. This is because big asset bubbles have preceded many modern recessions, even though CPI appeared tame at the time.”

“As I’ve noted previously in this space, numerous asset bubbles are expanding and the bursting of any one of them could prove catastrophic. The US is in the middle of its longest economic expansion in history, but we have no idea how and when it will end. However, the bursting of historic asset bubbles – from the tulip mania in the 1600s, the tech bubble of the late 20th century, and the housing bubble this century – has rarely been benign. Economic growth usually contracts after big asset bubbles burst, and the systemic reverberations from larger ones are greater, as we saw in the aftermath of the Great Financial Crisis.”

“I do not want to be an economic Cassandra, but MMT goes against every major economic principle – supply & demand, limited resources, rational behavior, incentives, etc. With this in mind, MMT proponents would be wise to come clean about the real risks of their proposals.”

“My final question to MMT proponents is how have historic economies that printed lots of money fared over the long term, and how might a review of asset bubbles that preceded systemic collapses give us additional tools to monitor today’s real inflationary risks? I would submit that all these important economic questions are simply being ignored by MMT proponents. With that in mind, we would all be well-advised to get back to balancing our collective checkbook, while keeping a close eye on the massive asset bubbles that ultra-loose monetary policy has already bestowed upon us. Doing so will help us reduce the risk of future systemic collapses over the course of a full and inevitable economic cycle.”

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  2. ‘I stopped at three bars. Each had one or two patrons. I talked to the bartenders and asked, ‘Is this what’s going on here?’ Nobody’s sure’

    ‘The scene was straight out of a Hollywood disaster film’

    China was already circling the bowl before the virus. Like unca Warren says about the tide going out. Did the tide make them swim naked?

    No. But ten years of way too easy money and artificially low interest rates has encouraged a lot of stupid behavior. And bad decisions getting wiped out are what causes recessions. That is econ 101.

    1. The Fed mission has morphed into the Sisyphean task of permanently removing all risk from all markets, stock, bond, and housing. I never overpaid for a house because, if I got sick and couldn’t work for a few months, I’d be ruined. It’s part of the equation in pricing the asset, the worst case scenario. Now the world is getting sick and everything is priced for perfection. Everything was good so nothing bad could happen. The Fed erased the worst case scenario variable from the asset pricing equation. Now they think they can fix the math with a bigger eraser.

      1. It’s not just the federal reserve. Australia’s CB/treasury pulled the trigger months ago and just doubled down. Now Canada. It’s not good that this is their only solution.

        1. Now the FED’s begging to be allowed to broaden their asset purchases. This whole thing is a scam. That’s not a free-market economy, that’s Socialism.

          1. “Now the FED’s begging to be allowed to broaden their asset purchases. This whole thing is a scam. That’s not a free-market economy, that’s Socialism.”

            +1 They’re out of ammo, backed against the turn-buckle!
            https://imgur.com/a/x9us4oD

          2. That’s not a free-market economy, that’s Socialism.

            Even worse. When no one but the group with the printing press has any money but the price of everything can’t be allowed to fall, then eventually the printing press club owns everything. That’s what it takes to keep prices from falling and overextending banks from failing. It’s a club…

          3. then eventually the printing press club owns everything

            History tells us that’s not how such things end.

          5. This may come soon. Dow futures down >1000 points in overnight market. We might not have a black Monday. We might have a black hole Monday. Gold over 1700$ for first time since 2012. We live in interesting times. Wouldn’t be surprised to see the Fed move to purchase equities this week even though it is prohibited by its charter. But since when has that stopped them from doing anything.

          6. S&P 500 futures just went limit down. Trading halted. Draconian market interventions likely this week.

          7. History tells us that’s not how such things end.

            Agreed. But it appears to me that the end game has to become obvious to all before anything changes course. We’re not there yet…so they keep printing and buying.

      2. “…permanently removing all risk from all markets, stock, bond, and housing. ”

        This sums it up in a nutshell. Though I would add there’s an implicit promise to the really big players: they can privatize all their profits but socialize all their losses.

        1. With blanket free risk protection, gamblers make all kinds of crazy bets under the certainty that they will be made whole with bailouts if the gambles go south.

  3. ‘The financial collapse between 2007 and 2009 caused unprecedented disruptions in consumption-related industries. During that time, MGM Resorts’ stock price dropped from $99.75 a share to $1.89 a share. Visitor volume dropped by almost 3 million. Nevada’s unemployment rate hit 11.8 percent – and more than 19,000 workers in the hospitality business lost their jobs’

    The guy in this article mentions demand dropped in 2018 too. What happened then? Interest rates went up a tiny amount. Recall that tens of thousands of new unsold shacks piled up lickety split.

    This is what happens when you kick the can repeatedly down the road for over a decade. And what does the MSM do? “Oh please mister central banker, save us!”

    I said it many years ago: we have to at least consider that central bankers are complete idiots that have no idea how real economics works nor what they are doing.

    1. They are not idiots, they know exactly what they’re doing. They are playing “heads I win, tails you lose.”

          1. “Here’s the picture when Bernanke was asked if his policies are unfairly punishing the working class and the poor:”

            I was trying to be serious, but you got me to chuckle.

    1. I watched a speech by the head Dallas fed guy that took place in February. You know what he went on about? How great globalism is and how we need open borders.

      In a way this virus thing is a perfect example of globalist folly. Send our manufacturing there, turn ablind eye to their environmental disasters for decades, IP theft, human rights abuses, and the crazy bat eatin’ crap they do. How many viruses are we on now from these fools? Oh but the globalists set up a “just-in-time” international supply chain with China right at the center.

      Sure looks like a nutty idea now, eh? And why did they tell us for decades that China was gonna rule the world and we better just get used to it? Do globalists like the super state, command and control economy and surveillance dominance with zero public input tolerated like China’s? Unless of course it’s the type of input that North Korea insists on.

        1. “There’s money to be made in creating dependency.”

          Yep. That’s how I make my living.

      2. The worst of all was to allow our drug manufacturing to go to China. That explicitly jeopardized the safety of the US and its people. And lo and behold, here comes a nasty virus to expose the folly. Not many news outlets picked up on this story, but China knows they have a Vise Grip on the balls of the US. They are now seemingly willing to blackmail us. Check this out:

        “China’s CCP media mouthpiece, Xinhua News, has published a new article titled “Be bold: the world owes China a thank you.” US government officials, such as Secretary of Commerce Rose, US Secretary of State Pompeo, and US White House Economic Adviser Navarro, have publicly gloated over China’s new crown pneumonia epidemic, saying that the outbreak of the new crown pneumonia epidemic in China is good for the United States and will help companies return to the United States…At this time, China has not fallen into rocks and has not condemned the United States. At this time, the United States should recognize its mistakes. Apologize to China for your actions…If China retaliates against the United States at this time, including a travel ban or a strategic restriction over medical exports, America would be “plunged into the mighty sea of coronavirus.””

        https://www.philstockworld.com/2020/03/05/china-hints-at-blackmail-over-pharmaceutical-exports-would-plunge-us-into-mighty-sea-of-coronavirus/

        I still believe no trade deal was the best trade deal possible. It essentially left the tariffs in place and forced companies to leave China. Sure, they were moving to Vietnam, etc., but at least it was punishing China and forcing producers to think about the ramifications of their business models. It’s not cheap to have to move.

        1. I have no idea what exactly they are demanding an apology for while threatening us. That we need complete control over strategic supplies is obvious.

          1. The rest of the world feels they have the right to help themselves to the success of the United States. Because the US (and Western Europe I guess) didn’t get to be successful through resourcefulness, ingenuity, freedom of religion, freedom from hereditary privilege, and yes, winning some wars, and hard work of its people, including bootstrapping legal immigrants. Nope, it’s because we “repressed” other countries.

      3. Do globalists like the super state, command and control economy and surveillance dominance with zero public input tolerated like China’s?

        One prerequisite of installing such a state is a disarmed population. Biden and the DNC will waste no time implementing the Soros/Bloomberg “gun control” agenda if elected.

      4. This pandemic changes everything . Check out oil futures down 20%

        March will be an interesting month.

      5. They dont like it, they tent their pants thinking about it. They believe, with plenty of evidence, that they’ll be the ones wielding the power. What’s to fear when the cream of the crop control everything? It worked in Venezuela, the USSR, China. I mean, heck, they’ve already beaten COVID19 into submission. Sign me up.

        2. they’ve already beaten COVID19 into submission

          I’m not buying anything they’re selling.

    2. “The Federal Reserve slashed interest rates by half a percentage point last week, citing a need to protect small- to medium-sized businesses from the economic ripple effects of the coronavirus. But a Seattle-based regional bank doubts that lower interest rates will build confidence in a community grappling with its own coronavirus outbreak.”

      When you have but a single arrow in your quiver, it’s the one that you use.

  6. Many have bet heavily on shale in West Texas, a play that needs a constant flow of capital to keep drilling as wells deplete.

    Wait, I thought drilling paid for itself and threw off a bunch of cash, too?

        1. I’ve purchased software and/or apps from many countries around the world, but nothing yet from Saudi Arabia.

  7. Best health care in da world!

    Less than 2k tested for corona. Must not be covered by insurance. Preexisting? Ya it existed before in china.

  8. This sounds like a very challenging situation. I’m starting to develop a deeper appreciation for America’s Costco shopping spree.

    1. Biogen orders employees to work from home after employees at Boston meeting test positive for coronavirus
      Published: March 8, 2020 at 12:34 p.m. ET
      By Ciara Linnane
      There are now 13 cases of the novel coronavirus in Massachusetts, most of related to a Biogen management meeting at a Marriott hotel in Boston
      Biogen workers attending a meeting at the Marriott Long Wharf Hotel in Boston tested positive for COVID-19
      Getty

      Biogen Inc. has ordered all staff to work from home until further notice, as part of a sweeping round of measures implemented after employees who attended a management meeting in Boston tested positive for the coronavirus that causes COVID-19.

      Biogen (BIIB, +0.07%) had about 7,400 employees worldwide as of Dec. 31, according to its latest 10-K filing with the Securities and Exchange Commission, located in Massachusetts; Research Triangle Park in North Carolina; and Baar, Switzerland.

      There are 13 confirmed cases of the virus in Massachusetts, according to the Massachusetts Health Department, a majority of them connected to Biogen and the meeting it held late last month at the Marriott Long Wharf Hotel.

      About 175 people attended the meeting, including Chief Executive Michel Vounatsos and workers from the Swiss operation, the company told MarketWatch.

      In a statement, the biotech giant said it has informed all workers who attended the meeting and are symptomatic that they will be contacted by the public health authorities to be tested and that they must self-quarantine.

      “Additionally, these employees are being asked to isolate from the people they live with (e.g. family members, loved ones or roommates) until further notice, and these close contacts must also be quarantined until further notice,” the company said in a statement.
      …

      1. The head of the CDC should be fired. They allowed this virus to go almost unchecked for 6 weeks, spreading across the entire country. That’s not Trump’s fault. It’s also not Trump’s fault that the test kits weren’t available, and that the ones we had were faulty. The President isn’t on the procurement team. The whole reason the CDC exists is for an emergency like this, and they completely failed.

        1. If public health were a concern to the globalists or their political minions, we couldn’t have Third World disease vectors flooding in across our southern border.

          1. Just as importantly, these agencies have turned into ineffective bureaucratic cesspools, where graft, nepotism and incompetence reign supreme.

          3. Just as importantly, these agencies have turned into ineffective bureaucratic cesspools, where graft, nepotism and incompetence reign supreme.

            Nice work if you can get it.

          4. Nice work if you can get it.

            Not sure I’d want to pay the price of admission.

          5. By the way, this has nothing to do with the stereotype of the lazy government worker. Those supposedly lazy Feds are the staff level (GS-13 or lower). These were deliberate decisions made by upper level SES (senior executive service) management. My little section of government is starting to see it too.

        2. Is anything ever Trump’s fault? The guy blowing the big economic bubble including housing, I have no idea why he’s so loved on this site.

          He was the one responsible for gutting funding for anything related to science, while bailing out farmers from his trade war.

          1. I don’t like him. Didn’t vote for him due to my “no a-hole” rule. But it’s easier to appreciate him if you grade him on a curve relative to everyone else who wants his job.

          2. He certainly has made a few blunders in the way he’s talked about the virus, however he is not the person who is handling the day to day operations. The CDC is an embarrassment.

          4. Science R&D was been gutted 25 years ago. And downstream processes were optimized and sent to China 20 years ago.

            And this bubble has been blowing up since 2009. It reached housing in about mid 2013.

            I don’t think we can pin any of this on the President.

          5. “Science R&D was been gutted 25 years ago.”

            I remember Interior’s Denver Technical Center being gutted back in 1998. The top scientists, “the jedi,” were given the VERA option. Everyone else had to fend for themselves.

          6. “Is anything ever Trump’s fault?” = “True.Believer’$” = cult member volunteer.

            There are lot$ of Cult$ … Either, your a member or knot.

      2. I hope that they are also testing employees at the hotel. If they weren’t the source of the infection, they are probably infected now.

    2. I just cleaned out the manager’s special meat bin (me, pay retail?) at Safeway, one package of TP, and a bakery markdown slice of carrot cake. I actually need to get some non-prep items at Walmart but I don’t want to go there during daytime on a weekend. Overslept on the daylight saving time to make a 6am Walmart run this morning.

      1. I just cleaned out the manager’s special meat bin (me, pay retail?) at Safeway

        Picked up a package of boneless pork loin chops at Sam’s yesterday for $2.40/lb. Also splurged on a couple of USDA Prime strip loins for $10/lb.

      2. I popped into the nearby Walmart Supercenter this evening to grab something. Grocery area didn’t seem any more cleaned out than it normally is on Sunday evening. I also took a spin through the Pharmacy area. Same there, except the soap section looked rather empty. And of course, no alcohol-based hand cleaner in any size container was to be seen (I didn’t ask if they had any in the back).

  9. ‘the Xinhua News Agency published an article with this headline: “With Reason on Our Side: the World Should Thank China, proving, yet again, that the CPC’s shamelessness knows no bounds.’

    ‘The Xinhua article says: “Currently, there is this din blasting that China owes the world an apology. This is very ridiculous, because China has made enormous sacrifices to combat the novel coronavirus epidemic and paid enormous economic costs to cut off the transmission routes of the coronavirus. No other country has made such great sacrifices and efforts.”

    “We should now say, with reason on our side, that the United States owes China an apology, and the world owes China a thank-you; without the enormous sacrifices and efforts made by China, the world could not have gained a precious window of time to combat the novel coronavirus epidemic; one can say that China has, by its own strength alone, staunchly held off the novel coronavirus epidemic for a very long time. It’s truly earth-shattering, and the gods themselves would be moved!”

    ‘Xinhua’s article is playing a game of counterattack, the thief yelling “catch the thief,” and shedding the blame. Its crux is to portray the coronavirus epidemic as purely a force majeure event, evading and covering up the manmade disaster. The pivotal point in the development of the epidemic is that in its early stages, the Chinese authorities—first and foremost Xi Jinping—did not allow public announcement of it and refused to activate emergency protocols, hence missing the window to prevent the spread of a largescale epidemic, causing a public health disaster in the entire Wuhan, the entire Hubei Province, the entire China, and even the entire world.’

    ‘The Chinese authorities, especially the “almighty” Xi Jinping, had made a huge screw-up that they then tried to hastily fix. And just as the remedial efforts began to yield some results, they rushed to publicize them in a vain attempt to steer the world’s attention to only the remedial efforts and away from the screw-up itself. And they even went so far as to say that “the world owes China a thank-you.” The culprit has shockingly become the savior. Is there anything more shameless than this? In publishing this article, what Xinhua ends up bill-boarding is not a case of “reason on our side,” but a guilty conscience. The authorities know that they have become the target of widespread disdain, and there is no way for them to directly defend themselves. Therefore they need to muddy the waters, divert attention, and play the offense as their defense.’

    ‘This narrative of “the world owes China a thank-you” is extraordinarily absurd, without a doubt. But saying “China owes the world an apology” is not correct either. We should say: It is the Chinese authorities, first and foremost Xi Jinping, who owe an apology to the people of Wuhan, the people of Hubei, the people of China, and the world.’

    https://www.hrichina.org/en/press-work/guest-commentary/xi-jinping-owes-apology-chinese-people-and-world

    Hey Xi, here’s a big F-you from the HBB!

    1. I did not see this before I posted a similar article above. Both are quite rich. Yeah, F**K YOU, Xi!

    3. Watched a interesting youtube “movie” on one month in China battling the outbreak. propaganda piece but it did show dead people lying on hospital floors.

  10. George @ Forbes is right on the money.

    The CPI is a bit of a joke. And even without studying history, seems like simple logic would tell people that printing money out of thin air indefinitely will eventually completely devalue it.

  11. Coronavirus death toll in Italy rises from 233 to 366

    The number of deaths from coronavirus in Italy has risen from 233 on Saturday to 366, officials have said. The total number of confirmed cases now stands at 7,375 – up from 5,883 on Saturday.

    https://www.theguardian.com/world/live/2020/mar/08/coronavirus-live-updates-third-death-in-australia-as-cases-reach-more-than-70

    I think I’m beigining to undertsand why Italy are trying to lock down. Tis a pity others will pay no heed until it hits them.

    1. Happy Brexit!

      Here in the USA, our perception of the North is that London and the Home Counties think of the North as uncultured, ignorant, xenophobic, etc, similar to how the coasts view flyover here. Is that true?

      1. Well, it was the vote swing in northern England that sent Labor packing, so of course they hate them, then again Labor has held them in utter contempt for ages. but expected their loyal votes.

    2. Raw death rate is 366/7,375 = 5%.

      Probably reflects the age distribution of the Italians who caught it…

    3. The numbers are a lagging indicator. Waiting until the numbers look ugly is a failing strategy. That is why I have said all along that China’s lying essentially guaranteed a world pandemic. If they would have been honest and said “hey, this is really bad and we need your help in stopping it,” the globe could have done a much better job. Instead, China was trying to cover it up.

    4. The cases and deaths in Oz are interesting, given that it’s still summer down there…

  12. Glastonbury takes place in 16 weeks’ time, with Taylor Swift, Paul McCartney and Diana Ross as headline acts and more than 200,000 people expected to attend. Organisers said they were working closely with all the relevant agencies: “We continue to plan and prepare for the event, while at the same time closely monitoring developments with the coronavirus situation.”

    The Hay literature and arts festival, which takes place 21-31 May, is still expected to go ahead, just as it weathered the foot and mouth crisis of 2001.

    In a statement, the Hay festival director, Peter Florence, said: “As ever, the safety of our festival-goers, speakers and staff is of paramount importance to us. We continue to monitor the situation closely and follow the best available advice from the chief medical officer. We will inform festival-goers immediately of any significant changes to our 2020 plans.”

    The French government’s ban on gatherings of more than 5,000 people in confined spaces has raised concerns for the Cannes film festival, due to take place 12-23 May. Organisers have responded by saying gatherings of that size do not take place during the festival. On Thursday a spokesperson said: “As of today nothing indicates that the Cannes film festival will not take place.”

    https://www.theguardian.com/world/2020/mar/08/glastonbury-hay-festival-organisers-press-on-despite-coronavirus-fears

    and coming up in the enxt few days

    The Killarney St Patrick’s Day festival, a six-day series of events, which kicks off the main tourism season in the Co Kerry town, is to go ahead, organisers said.

    The festival committee said it was receiving “lots of calls and inquiries” as to whether the parade would proceed as normal in light of coronavirus fears.

    “At this juncture we are 100 per cent full steam ahead and finalising our arrangements for the parade,” it said in a statement on Saturday.

    The festival, which is sponsored by Fáilte Ireland and Kerry County Council and opens at the weekend, is one of the biggest annual events in the southwest.

    Taking hours to circle the town, the parade itself draws visitors from the United States, the United Kingdom and German, French and other towns with which it is twinned.

    https://www.irishtimes.com/business/transport-and-tourism/killarney-st-patrick-s-day-festival-to-go-ahead-despite-coronavirus-fears-1.4196729

    and of cause no stopiing the horse racing

    With less than 48 hours to go until the Cheltenham Festival 2020 a case of coronavirus has been confirmed in Cheltenham.

    Preparations are already well underway for the four days of racing at Cheltenham Racecourse and horses have even started arriving at the course.

    Cheltenham Racecourse says it is ‘business as usual’ at the Festival but that it is following Government and public health advice.

    This week hundreds of thousands of people from across the globe will arrive in town bringing a £100million boost to the local economy.

    https://www.gloucestershirelive.co.uk/news/cheltenham-news/coronavirus-confirmed-cheltenham-just-48-3927931

    1. All these yuuuge gatherings… geeze, I was afraid to go to Wal-Mart today. This week I’ll look into working at home.

      I have an appointment with the tax preparer on march 20. I’m seriously thinking of postponing it and filing for the automatic six-month extension.

      2. I have an appointment

        Could you take a stab at the math, and your probability of catching this virus and then dying if you go to the appointment?

        JMO, but in six months we’ll be dealing with the fall wave, which might well be worser.

  13. What’s the over under on the # of days until a major school district closes down for an extended period? 5 days, 7 days? That’s gonna really throw a wrench in things for a lot of people when it does happen.

    1. Stanford and the University of Washington don’t count? Are you only talking about K-12 schools?

    2. Elk Grove, CA just closed theirs for next week. It’s a town we’ve talked about here before…suburb of Sacramento, large Chinese population, got HAMMERED on house prices ten years ago. You could actually get a decent deal there for a little while.

    1. The lady wearing the blue shirt in the second row has her mouth contort and head turn to her partner after trying to unsuccessfully will uncle Joe through the sentences he was unfortunately unable to complete.

      1. I don’t hate Sleepy Joe like I hate Hillary. I actually feel bad for what the DNC is doing to him. Trump is right, he should be “in a home” and not running for president.

        1. Biden IS the swamp. I can’t think of anything Trump could do which would prompt me to vote for Creepy Joe.

          1. Definitely the DNC. The RNC might not take him quite seriously enough but I think they’d like to see him take his best shot in an actual battle of ideas. The DNC has zero interest in allowing that.

          2. Republicans I’ve talked to actually like — or at least respect — Bernie Sanders. They think Bernie is being honest about what he wants to do.

          3. Bernie is being honest

            Not “honest”. Consistent. Communism is completely based on lies. Consistent lying is not the same as honest.

          4. They think Bernie is being honest about what he wants to do.

            Exactly. The truth can be a little scary but it is refreshing after the last 30 years.

          5. Relevant recent meme:
            “It’s not socialism, it’s democratic socialism.”
            “Why? Is there something wrong with socialism?”

          6. There’s something terribly wrong with the current system, which is why Bernie Sanders is even in this thing.

    1. ‘We have seen very lethal viruses. We have seen certainly, Ebola, or Nipah, or any of the other diseases that CEPI, the organisation that I run, works on’

      From the comments:

      ‘CEPI was founded in Davos by the governments of Norway and India, the Bill & Melinda Gates Foundation, the Wellcome Trust, and the World Economic Forum’

    2. In a country where the majority can’t scrape together $500 of cash for an emergency, this can only end badly. “Work from home” is just a meme for white collar brogrammers and government goons. The majority of USA will be going to work, and will continue going to work, because they can’t afford not to.

      “This sucker could go down” — George W. Bush

      1. “In a country where the majority can’t scrape together $500 of cash for an emergency”

        now that statistic… The interesting thing about it is they neglected to explain why this is. Did you know? Well I’ll tell you. If you read the article a little further, it goes into great detail into explaining that those who cant pull together $500 had either bought a house or bought a house then lost it.

        True story.

        Centreville, VA Housing Prices Crater 29% YOY As One Fairfax County Broker Conceded, “There Is Fraud In Every Transaction”

        https://www.movoto.com/centreville-va/market-trends/

        *Select price from dropdown menu on first chart

        As noted economist said, “Housing prices are cratering.”

        1. “True story.”

          So you are saying Realtors are still Liars and they want to sell a house even if they have to cut 2 inches off the bottom of the front door so fried eggs and pizza can be slid under it to the quarantined Coronavirus buyer.

          1. “can be slid under it to the quarantined Coronavirus buyer”

            I’m on Postmates email list. Yesterday I received a marketing email from them announcing “Non-Contact Delivery” is now available. It’s about to get really real out there…

          2. pizza can be slid under it to the quarantined Coronavirus buyer

            How do you know that the kid who made your pizza at Dominoes isn’t a carrier? Will the oven kill the germs?

          3. “It’s about to get really real out there…”

            I am not saying this is nothing but the Coronavirus panic as it is today in the Media and on Blogs like this one did not exist in 2009. The article I posted yesterday said the 2009 swine flu killed between 284,500 and 579,000 world wide below it says 1.4 billion people contracted it ,and for the life of me I can’t remember it being discussed here and if it was, it certainly was nothing like this.

            The 2009 flu pandemic or swine flu was an influenza pandemic that lasted from early 2009 to late 2010,

            leading to the term “swine flu”.[2] It is estimated that 11–21% of the then global population (of about 6.8 billion), or around 700 million–1.4 billion people contracted the illness — more in absolute terms than the Spanish flu pandemic.[3][4] However, with about 150,000–575,000 fatalities,

            https://en.wikipedia.org/wiki/2009_flu_pandemic

            Americas especially hard hit by 2009 swine flu, study finds

            by MAGGIE FOX
            NOV 26 2013, 5:06 PM ET

            CDC says H1N1 infected 61 million Americans during the pandemic and killed around 12,000. H1N1 is now part of the annual seasonal flu mix.

            https://www.nbcnews.com/healthmain/americas-especially-hard-hit-2009-swine-flu-study-finds-2D11657478

          4. “How do you know that the kid who made your pizza at Dominoes isn’t a carrier? Will the oven kill the germs?”

            The fried eggs and pizza thing was from an old blue collar joke, probably the kind that brought the wrath of Elizabeth Warren down on Michael Bloomberg on the debate stage.

            I probably shouldn’t but oh well, I’ll try it.

            A guy feels bad so he goes to the doctor. The doctor does a bunch of tests and leaves him in the examination room.

            About a half an hour later the doctor returns and says…

            I am sorry son bout I have some bad news, (pause) you’ve got HAGS.

            The guy says HAGS? What the hell is HAGS?

            The doctor replies…

            Herpes, AIDS, Gohneria and Syphilis.

            OMG! OMG! What do I do!? What do I do!?

            The doctor says I’m going to prescribe fried eggs and pizza.

            The guy asks… Will that cure me?

            The doctor replies…

            No, that’s the only thing they can slide under a door.

        2. “If you read the article a little further, it goes into great detail into explaining that those who cant pull together $500 had either bought a house or bought a house then lost it.”

          If you follow “/r/DeadBedrooms” one would conclude that buying a house that you can’t afford results in a sexless dead bedroom.

      2. “Work from home” is just a meme for white collar brogrammers and government goons.

        Actually, if you work for a larger company, at a desk and use a computer to get your work done, you can probably WFH. But yeah, most people can’t. If they are told to stay home I suspect there will be emergency unemployment benefits and qualifications for SNAP will be greatly relaxed.

    3. MSM says don’t panic and yet somehow I just don’t believe them or what they are saying, ” its just like the flu” OK……

  17. Markets
    Plummeting oil prices and mortgage rates could boost consumers rattled by coronavirus fears
    Published Sun, Mar 8 2020 2:30 PM EDT
    Updated Moments Ago
    Emma Newburger
    Key Points
    Oil has plummeted into bear market territory as the virus has led to weaker demand, and OPEC so far has failed to step in and reach a deal to cut production, which could lead to an even more dramatic drop in prices this year.
    The average rate on the popular 30-year fixed mortgage has fallen to an 8-year low.
    “The question is whether the fear factor attributable to the virus will overwhelm any positive impact from lower gasoline prices and lower mortgage rates,” Yardeni Research’s Edward Yardeni said.
    …

    1. Putin’$ Ru$$ia+ … – $ad $audi MB$ = Oil.Glut$ OPEC+ Cat.fight$

      Putin Dump$ MB$ to Start a War on America’s $hale Oil Indu$try

      By Ilya Arkhipov, Will Kennedy, Olga Tanas and Grant Smith
      Bloomberg |March 7, 2020

      (Bloomberg) — At 10:16 a.m. on a wet and dreary Friday morning, Russia’s energy minister walked into OPEC’s headquarters in central Vienna knowing his boss was ready to turn the global oil market upside down.Alexander Novak told his Saudi Arabian counterpart Prince Abdulaziz bin Salman that Russia was unwilling to cut oil production further.

      The Kremlin had decided that propping up prices as the coronavirus ravaged energy demand would be a gift to the U.S. shale industry. The frackers had added millions of barrels of oil to the global market while Russian companies kept wells idle.

      Now it was time to squeeze the Americans.

      After five hours of polite but fruitless negotiation, in which Russia clearly laid out its strategy, the talks broke down. Oil prices fell more than 10%. It wasn’t just traders who were caught out: Ministers were so shocked, they didn’t know what to say, according to a person in the room. The gathering suddenly had the atmosphere of a wake, said another.

      For over three years, President Vladimir Putin had kept Russia inside the OPEC+ coalition, allying with Saudi Arabia and the other members of the Organization of Petroleum Exporting Countries to curb oil production and support prices. On top of helping Russia’s treasury – energy exports are the largest source of state revenue – the alliance brought foreign policy gains, creating a bond with Saudi Arabia’s new leader, Crown Prince Mohammed bin Salman.

      But the OPEC+ deal also aided America’s shale industry and Russia was increasingly angry with the Trump administration’s willingness to employ energy as a political and economic tool. It was especially irked by the U.S.’s use of sanctions to prevent the completion of a pipeline linking Siberia’s gas fields with Germany, known as Nord Stream 2.

      The White House has also targeted the Venezuelan business of Russia’s state-oil producer Rosneft.

      “The Kremlin has decided to sacrifice OPEC+ to stop U.S. shale producers and punish the U.S. for messing with Nord Stream 2,” said Alexander Dynkin, president of the Institute of World Economy and International Relations in Moscow, a state-run think tank. “Of course, to upset Saudi Arabia could be a risky thing, but this is Russia’s strategy at the moment – flexible geometry of interests.”

  18. Got Latte$? … Kelly.Annie: “it$ contained!!”

    Bloomberg
    Starbuck$ Barista in Downtown Seattle Store Diagnosed With Viru$

    Bloomberg | By Ed Ludlow 1 day ago

    (Bloomberg) — Starbucks Corp. said a barista at a store in Seattle, the epicenter of the coronavirus outbreak in the U.S., was diagnosed with Covid-19 and will self-quarantine at home.

    Tbb?he Seattle-based company learned of the diagnosis on Thursday night, according to a spokesperson. The branch at its First & University location in downtown Seattle was immediately closed and a deep cleaning was initiated overnight, the coffee-chain said.

    “We did talk with public health authorities as soon as we realized what happened,” the spokesperson said. “These officials have encouraged us to reopen the store after further preventative cleaning, which we have already conducted, staffed by partners who have no known impact from Covid-19.”

  19. A “headache” & now a “cold” … “just.go.to.work”

    Virginia-Based Marine Is State’s 1st Coronavirus Case

    7 Mar 2020 | Military.com | By Hope Hodge Seck

    Hours after news broke of the first confirmed coronavirus case affecting a U.S. service member in Europe, Pentagon officials announced that a Marine from Fort Belvoir, Virginia, near Washington, D.C., has tested positive for the disease.

    In a statement from the Defense Department released Saturday evening, officials said the Marine had tested positive for coronavirus, formally known as COVID-19, that same day, and is now being treated at Fort Belvoir Community Hospital.

    “The Marine recently returned from overseas where he was on official business,” the announcement stated. “The Secretary of Defense has been briefed. The White House has been notified.”

    News of the Marine’s diagnosis comes the same day a sailor based in Naples, Italy was also confirmed to have coronavirus. There are now three confirmed cases affecting U.S. troops; a 23-year-old soldier in South Korea has also tested positive for COVID-19.

  20. If $audi+ attacked Ru$$ia+ from behind, would Greece help?

    Mohammed bin $alman
    $audi crown prince $ignals new purge with ‘trea$on’ arrests
    King’s brother and Prince Mohammed bin Salman’s predecessor are accused of coup plot

    Martin Chulov | Sat 7 Mar 2020

    Security forces set up roadblocks across the Saudi capital on Saturday, sparking fears of unrest in the wake of the arrests and unsubstantiated suggestions that Prince Mohammed may soon assume the throne. The king is known to be aiming to receive dignitaries for the G20 summit in Riyadh in November, a landmark event on the Saudi calendar.

    “It’s difficult to be 100% about what is going on,” said a former aide to a Saudi minister. “The bubble has been so well prepared. The king is so cloistered that no one knows for sure.”

    A former senior diplomat, well versed in Saudi palace intrigue, said the latest purge appeared to be part of a systematic approach to eliminating dissent as Prince Mohammed’s ascension drew near.

    Using an Arabic term, “Bani”, to suggest “tribe”, he said: “So he’s gone for the Bani Abdullah, Bani Fahd and Bani Sultan. Now it’s the Bani Nayef. There’s still a son of Saud bin Nayef [Mohammed bin Nayef’s brother] at the General Intelligence Presidency. He’ll have to go, too. This is like Baghdad in the 1960s.”

    In the late 60s Saddam Hussein launched a coup that purged Iraq’s monarchy and consolidated himself as leader for more than three decades.

    A purge of princes and aides continued across Saudi Arabia on Saturday after the kingdom’s crown prince, Mohammed bin Salman, claimed to have foiled a coup being plotted by two of the country’s most senior royals – widely seen as among the few left standing in the way of his ascension.

    Prince Ahmed bin Abdul Aziz, the only full brother of the monarch, King Salman, and Mohammed bin Nayef, who was heir to the throne until being ousted by Prince Mohammed, face treason charges after being accused of organising against the ambitious heir.

    Their arrest on Friday shocked the country and sparked a new round of speculation about the 84 year old king’s hold on the throne. Exiled dissidents suggested Prince Mohammed’s announcement masked an imminent push to take power from his father. The claims were given impetus by royal court insiders, one of whom suggested through a source that the moves against the two princes were made as a preventative measure, following a sudden deterioration in the King’s health. However, those claims were firmly denied by officials inside Saudi Arabia.

    King Salman, is believed to have signed the warrants that justified his brother’s arrest and that of the man slated to replace him until Prince Mohammed was drafted in, following a palace coup in 2017, and named crown prince.

    Since then Prince Mohammed, now 34, has assiduously eliminated threats against him, most famously by later that year locking up much of the country’s business elite in the Ritz-Carlton in Riyadh, including senior royals, who were forced to sign over assets. Some were also stripped of their positions.

    A year later, in the aftermath of the murder by Saudi agents of Jamal Khashoggi in Istanbul, Prince Ahmed was lured back to Saudi Arabia after many years living in exile in London. Known as a critic of the crown prince, his return was hailed as a sign that the hard-charging heir was prepared to tolerate dissent – a claim widely rejected by critics at home and abroad.

    1. This is why I donated money to Ron Paul’s campaign in 2007.

      Our humble blog host has posted in the past about how Rep. Paul was cheated out of delegates at a state convention (Arizona? in 2012?)

      2. I remember it well. The Mittens campaign team were the main culprits of election shenanigans against Dr. Paul.

  22. “It’$ a Hoax!” … $ad

    (Notice how “they” never mentions “how.many” were tested? Just how many are contagious … )

    Busine$$

    Stricken Crui$e Ship Passenger$ to Go to Military Base$

    Bloomberg | By Dana Hull |March 8, 2020

    Passengers of the Grand Princess cruise ship, where more than 20 passengers and crew on board are confirmed to be infected with Covid-19, will be sent to military bases for their mandatory quarantine.

    Almost 1,000 passengers who are California residents will be sent to Travis Air Force Base and Miramar Naval Air Station, and while those from other states will be quarantined at Joint Base San Antonio Lackland in Texas or Dobbins Air Force Base in Georgia, according to the U.S. Department of Health and Human Services.

  23. How is your coronacoin holding up to the virus outbreak?

    Bitcoin Faces “Gatling Gun” of Massive $100k Sell Orders on Bitfinex
    Cole Petersen 2 mins ago

    The crypto market has found itself caught within an intense downtrend over the past day, with Bitcoin and most major altcoins incurring intense selloffs that have led them to erase the majority of the gains incurred throughout the early months of 2020.

    It appears that this Bitcoin-driven selloff has been catalyzed by a massive influx of selling pressure from traders on margin trading platforms, who have been offloading significant amounts of cryptocurrency over the past several hours.

    If this selling pressure doesn’t relent in the days ahead, it is highly probable that the crypto markets will see further near-term downside.

    Bitcoin Leads Massive Crypto Market Selloff

    https://www.newsbtc.com/2020/03/08/bitcoin-faces-gatling-gun-of-massive-100k-sell-orders-on-bitfinex/

      1. But bitcoins are backed by blockchain and blockchain is backed by… well nothing other than the availability of computers having power and network connectivity and allowing the digital nothings to infiltrate your hard drive. This is why buttcoin is worth more than gold! -millennial

  24. Thanks for all the replies the other day – it was quite the discussion. I was a bit too busy to reply further yesterday.

    Mrs Spiffy has come down sick this morning. not sure what it is yet. Obviously, given our location, and our low ‘Kevin Bacon distance’ ( < 2 ) to confirmed cases, we're being cautious.

      1. We will. There are 2 vectors we are especially worried about – her oldest was volunteering (or whatever it’s supposed to be- she’s in a college program for early education and its a requirement for the program) at a place with little kids that now has a confirmed parent.. and one of the execs at her company who travels a lot and did recent events with her team may have it (not sure if confirmed).

        1. The worst part is the asymptomatic spread. You basically have to assume everybody has it to protect yourself.

          1. Honestly, we’re thinking it may be better to get it early, and recover before services get overwhelmed.

            Other than medical services we got things covered more or less – Casa Spiffy was decently prepped before the shortages/runs on household goods began, and despite all the big expenses over the last couple years (house, surgery, etc), we’ve got enough liquid cash to survive one person being out of work for 9-12 months. So we should be able to ride out most other situations as the virus runs its course.

          2. Honestly, we’re thinking it may be better to get it early, and recover before services get overwhelmed.

            That’s what I was thinking until they started saying you could get it more than once. Of course that isn’t quite settled science yet…but they keep saying it.

  25. I dunno TDS has morphed into CVS corona virus syndrome. One infected over there and next day we will have swat teams and tanks coming down your street….stay inside stay inside or else.

  26. The Financial Times
    Opinion Equity valuation
    US economy is dangerously dependent on Wall Street whims
    The Federal Reserve faces pressure to keep cutting rates to keep asset prices high
    Rana Foroohar
    US Asset Bubble Economy
    © Matt Kenyon
    Rana Foroohar 5 hours ago

    Watching the markets these days is like watching the seven stages of grief — shock, denial, anger, bargaining, depression, testing and, finally, acceptance. We clearly have not reached that last stage yet. This isn’t really about coronavirus — that was simply a trigger for a correction I have long expected. The US is in the longest economic recovery cycle on record, with mounds of global debt, falling credit quality, and decades of low interest rates driving asset prices to unsustainable levels.

    The reluctance of investors, politicians and central bankers to accept that is not just an example of the natural human tendency to put off pain. Rather it is something scarier and more factual. The truth is that the US economy is now dependent on asset bubbles for survival.

    This was sharply quantified in a recent edition of financial analyst Luke Gromen’s weekly newsletter “The Forest for the Trees”. About two-thirds of the US economy is consumer spending. But people’s spending patterns are not based on their income alone. Our personal consumption is also linked to our expectation of wealth held in assets like stocks and bonds.
    …

    1. The truth is that the US economy is now dependent on asset bubbles for survival.

      So sad but so true.

    1. State Department warns against cruise ship travel because of coronavirus risk
      A cruise ship off the coast of California has 21 infected people on board
      By Kim Lyons
      Mar 8, 2020, 5:10pm EDT
      Cruise Ship Stranded Off San Francisco After 21 Test Positive For Coronavirus
      Photo by Justin Sullivan/Getty

      The US State Department issued an alert Sunday urging US citizens “particularly travelers with underlying health conditions” not to travel by cruise ship due to the risk of coronavirus infection. The warning comes as 21 people on the Grand Princess cruise ship off the coast of California have tested positive for the coronavirus, according to the New York Times.

      The alert from the State Department says many countries have put into place strict screening protocols that have denied entry to ships and prevented passengers from disembarking, all to try to contain the spread of COVID-19, the illness caused by the coronavirus.
      …

      1. My theory is that these vessels themselves are asymptomatic carriers, especially the sewer systems and ductwork. The only thing to do is to get all the humans off, including the crew, and let the ships sit empty for a couple weeks. And then hose down everything with chlorine gas.

        So glad I live in a single family home. Now, if only I can avoid the virus at the office.

        1. hose down everything with chlorine gas.

          OK, you can’t do that. Sodium hypochlorite solution (AKA Hypo, AKA Chlorox) can be hosed, as they do in a meat packing plant. Say goodbye to any fancy brass fittings! Byebye electronics too.

  28. Health and Science
    Coronavirus live updates: US cases top 500 as Oregon joins list of states declaring emergencies
    Published Sun, Mar 8 2020 10:29 AM EDT
    Updated 30 min ago
    William Feuer
    Spencer Kimball
    Emma Newburger
    Men wear face mask as they ride on the subway on March 8, 2020 in New York City.
    KENA BETANCUR

    This is CNBC’s 24-hour live blog covering all the latest news on the coronavirus outbreak. All times below are in U.S. eastern time. This will be updated throughout the day as the news breaks.

    Here are today’s key headlines:
    – Oregon becomes the latest state to declare an emergency after cases double.
    – Washington state could impose mandatory measures to contain the outbreak as deaths increase.
    – The State Department warns against travel on cruise ships after 21 people test positive on Grand Princess.
    – The U.S. Army is restricting travel to South Korea and Italy.

    Here are the latest figures on the outbreak:
    – Global cases: More than 109,000, according to data compiled by Johns Hopkins University
    – Global deaths: At least 3,801, according to data compiled by Johns Hopkins University
    – U.S. cases: At least 511, according to data compiled NBC News
    – U.S. deaths: At least 21, according to data compiled by NBC News
    …

    1. Read that the Gov of Oregon is asking for 120Million for dealing with the virus, all the while claiming they’re testing X number of people a day and its nowhere near that. Sounds like another scam/cash grab by pols to prop themselves up, pay off unions, etc. for the coming election. I expect other states to do similar. No honor among thieves.

    1. West Texas Intermediate crude for April delivery US:CLJ20 plummeted 22% to $32.01 on Sunday, while May Brent crude UK:BRNK20 the global crude benchmark, fell 22% to $35.22 a barrel.

      1. The Saudis have yet to even open the spigots, and oil is already cratering. It’s quite spectacular.

        1. Poor, poor MB$, … poor, poor, $audi’$ … $ad.

          Do ya think Jarvanka will bee vi$iting $oon?, You know, to $ign the “Great.Middle.Ea$t.Peace.Treatie$”? … Next: North Korea Pha$e 3 v.86 … The anticipation is $taggering!

  30. I foresee massive financial pain ahead for my friend. He’s been speculating in stocks, crypto AND he’s closing on a $550,000 house which is really a $150,000 house masquerading at said $550k price.

    1. “closing on a $550,000 house which is really a $150,000 house masquerading at said $550k price”

      Cues up London Calling by the Clash but hears it as Denver Calling.

    2. “crack dealers need more cracks”

      Do you know Scooby and Jamal in South Akron? I haven’t talked to them since the 1990’s. They’re probably dead or in jail 🙁

    3. I have CDs maturing in the next month or so. I thought it was bad that they were at only 2. XX % apy. I’ll probably lucky to get 1% apy. 🙁

  32. Any thoughts on how much farther the rally in Treasurys has to go? Cratering crude should give them another shot of rocket fuel tomorrow.

    Bonds
    Feature
    Yes, Bonds Could Still Rally, Even With Yields Below 1%
    By Randall W. Forsyth
    March 6, 2020 8:46 pm ET

    “Bond Yields Hit Record Lows” is a headline that has been used repeatedly as Treasury yields fall below previously unimaginable levels. First, the 30-year bond yield fell past 2%; then, in the past week, the benchmark 10-year note crashed through 1%.

    A few market veterans also recall bond-market records at the opposite end, when long-term government securities topped 15% in the early 1980s. And even fewer stuck their necks out then to declare that, after more than three decades of rising yields and falling bond prices, investors should no longer shun bonds.
    …

    1. The Financial Times
      Equities
      Oil prices crash 30%, sending global stocks tumbling
      US 10-year Treasury yield slides below 0.5% as crude suffers biggest fall since first Gulf war
      Saudi Arabia launched a price war over the weekend following the collapse of its oil-cutting alliance with Russia
      © Reuters
      Hudson Lockett in Hong Kong 28 minutes ago

      Global stocks and government bond yields tumbled after oil prices crashed by almost a third, as the prospect of a crude oil price war hit markets already reeling from the coronavirus outbreak.

      Investors dumped equities on Monday after the price of crude fell by more than 30 per cent to four-year lows, marking oil’s biggest one-day drop since the 1991 Gulf war. The price crash ricocheted through equity and bond markets, sending the 10-year US Treasury yield down through 0.5 per cent to a record low and US stock futures sliding by as much as 5 per cent.

      The fall came after Saudi Arabia launched a price war over the weekend following the collapse of its oil-cutting alliance with Russia on Friday.

      As the trading session progressed, international marker Brent pared losses slightly to be down 29 per cent at $32.13 a barrel, while the sell-off for West Texas Intermediate sharpened to a fall of 31.8 per cent, putting the US marker at $28.16 a barrel.
      …

    2. It is almost as if all the money printed to keep asset prices high no longer has assets to inflate.

  33. My gut says that $hitcoin is going to crash spectacularly, sooner rather than later. I think a lot of the speculators are going to need that cash and they’re going to liquidate. Once there’s a race to cash, it encompasses every speculative asset.

    2. The Financial Times
      Opec
      Oil price crashes 30% as markets open
      US crude below $30 a barrel as Saudi tactics spook traders
      A Kuwaiti trader checks stock prices at Boursa Kuwait in Kuwait City, on March 8, 2020. – Kuwait Boursa authorities stopped trading after the Premier Index slumped 10 percent while the All-Shares index dived 8.4 percent, as shares in the energy-dependent Gulf plunged to multi-year lows after OPEC’s failure to agree on a coronavirus action plan prompted fears of an all-out oil price war.
      (Photo by YASSER AL-ZAYYAT/AFP via Getty Images)
      The huge sell-off follows the collapse of Saudi Arabia’s oil-cutting alliance on Friday © AFP via Getty Images
      David Sheppard and Anjli Raval in London and Hudson Locket in Hong Kong
      38 minutes ago

      Oil prices crashed as much as 30 per cent within seconds of the market opening on Sunday evening after Saudi Arabia launched an aggressive price war over the weekend, driving crude to its lowest level in four years.

      The huge sell-off follows the collapse of Saudi Arabia’s oil-cutting alliance on Friday, with Russia refusing to make deeper cuts to output despite the sharp hit to demand from the coronavirus outbreak. Saudi Arabia’s response — to raise output and offer its crude at unprecedented price discounts — comes despite a weakening economy and the threat of coronavirus becoming a global pandemic sapping demand for transport and fuel.

      “It is very rare for a demand collapse to coincide with a supply surge,” said Bob McNally at the Rapidan energy Group. “It is the most crude price-bearish combination since the early 1930s. The price collapse has just begun.”
      …

  36. Curious about everybody’s thoughts on bank “bail-ins,” which would punish some depositors. That’s what scares me – losing a portion of my cash ala Cyprus.

    1. Curious about everybody’s thoughts on bank “bail-ins,” which would punish some depositors’ Doubt it , more likely a deflation event as government forgives debt. One mans debt is another’s income kinda thing.

  37. – Finally someone in the financial sector that doesn’t have his (or her) head up their a$$ and isn’t afraid to tell it like it is: “The emperor has no clothes!”

    https://www.forbes.com/sites/georgeschultze/2020/03/02/modern-monetary-theory-is-not-the-answer/#291029165088
    Mar 2, 2020,08:58am EST
    Modern Monetary Theory Is Not The Answer
    George Schultze Contributor

    As I’ve noted previously in this space, numerous asset bubbles are expanding and the bursting of any one of them could prove catastrophic. The US is in the middle of its longest economic expansion in history, but we have no idea how and when it will end. However, the bursting of historic asset bubbles – from the tulip mania in the 1600s, the tech bubble of the late 20th century, and the housing bubble this century – has rarely [never] been benign. Economic growth usually contracts after big asset bubbles burst, and the systemic reverberations from larger ones are greater, as we saw in the aftermath of the Great Financial Crisis.

    In order to reign in deficit spending and control the appetites of politicians, Congress therefore prudently passed budget laws which limit the amount the US government can spend without offsetting revenue or a commensurate reduction in spending elsewhere. However, MMT takes the view that these laws are old fashioned and inhibit growth. The notion is that, because inflation as measured by CPI has remained benign, what we really ought to do is just change the law and aggressively spend an extra $500 BN or so to ignite some real inflation

    I do not want to be an economic Cassandra, but MMT goes against every major economic principle – supply & demand, limited resources, rational behavior, incentives, etc. With this in mind, MMT proponents would be wise to come clean about the real risks of their proposals. Printing another half trillion dollars to stimulate growth may sound great at first glance, but how will it impact all those citizens who relied on the government to balance its books? Will they lose confidence in our currency and thus start looking for alternatives (like cryptocurrency), and might this already be happening? Moving the goal posts midway through the game definitely makes getting a touchdown easier for one side, but what player (on either team) will truly want to compete in this newly-rigged game over the long haul?

    My final question to MMT proponents is how have historic economies that printed lots of money fared over the long term, and how might a review of asset bubbles that preceded systemic collapses give us additional tools to monitor today’s real inflationary risks? I would submit that all these important economic questions are simply being ignored by MMT proponents. With that in mind, we would all be well-advised to get back to balancing our collective checkbook, while keeping a close eye on the massive asset bubbles that ultra-loose monetary policy has already bestowed upon us. Doing so will help us reduce the risk of future systemic collapses over the course of a full and inevitable economic cycle.

    – We’ve been exposed to MMT for years already. MMT is the financial equivalent of COVID-19. Idiots!

      1. MMT = The Laffer Curve

        Something (for us now) for nothing (except from someone else later).

        Note that Trump’s tax cuts didn’t reduce the deficit either. Democrats have finally noted that lying and robbing the future works, and have started to compete on that basis. After all, given the ages of all the prominent politicians, they won’t be around for the consequences.

  38. “The benchmark 10-year Treasury yield broke below 0.5% for the first time ever as coronavirus fears, coupled with an all-out oil price war, sent investors flocking to safer government bonds.

    The yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.487% in overnight trading Sunday. The yield was last trading at 0.536%.”

    https://www.cnbc.com/2020/03/09/10-year-treasury-yield-plunges.html

    Negative rates, here we come!?

    1. At this point, is it accurate to say that the Treasury bond yield curve is inverted?

      1. Markets
        10-year Treasury yield hits new all-time low of 0.318% amid historic flight to bonds
        Published Sun, Mar 8 2020 8:02 PM EDT
        Updated 29 min ago
        Thomas Franck
        Yun Li
        Tim Boyle | Bloomberg

        The benchmark 10-year Treasury yield resumed its historic slide on Monday as investors continued to punish risk assets like stocks in favor of the safety of bonds between an all-out oil price war and contagion fears surrounding the coronavirus.

        The yield on the benchmark U.S. 10-year Treasury briefly touched an all-time low of 0.318% in overnight trading, adding another 30 basis points to an unprecedented fall in the key interest rate. That rate was above 1.5% as recently as mid-February.

        The 10-year yield, in particular, holds outsized importance in the U.S. economy for its use as a benchmark for mortgage rates and auto loans. The 30-year Treasury yield also hit a record low of 0.702%, breaching the 1% threshold for the first time in history. Bond yields fall as their prices rise.
        …

    1. Loverly … But remember, ba$ically, everything is just a “HOAX!”

      $ucker$, gotta $uck.

  40. $ad, does knot he know$ “it$ contained!” & Kelly.Annie has “Alternate.Fact$!” & basically Pence & dtRumpsis has declared it a “Huge.HOAX!”

    THE SLATEST

    Ted Cruz Self-Quarantines After Contact With Coronavirus Carrier at CPAC

    Slate | By DANIEL POLITI

    Sen. Ted Cruz said that he has decided to quarantine himself in his Texas home this week after he had brief contact 10 days ago with a person at the Conservative Political Action Conference who has since tested positive for covid-19. The Texas Republican wrote on Twitter that he was told of his brief interaction, which consisted of a quick conversation and handshake, with the individual on Saturday night. President Donald Trump and Vice President Mike Pence also attended the gathering of conservatives in late February but neither had contact with the person who has since tested positive for the virus.

    Although his brief interaction did not meet the stated criteria for self-quarantine he decided to do it anyway “out of an abundance of caution” considering he regularly meets with lots of people. He is not alone. Rep. Paul Gosar of Arizona also went into self-quarantine along with three of his senior staff after they had “sustained contact at CPAC with a person who has since been hospitalized with the Wuhan Virus.” Matt Schlapp, chairman of the American Conservative Union, which organizes CPAC, said he had “incidental” contact with the affected person but insisted he was “healthy as a horse.” Schlapp also shook Trump’s hand before the president spoke but the attendee who was infected with coronavirus did not go to the conference that day.

  41. Hey, aq.dannyboy, does knot lower fuel price$ help Boeing deal with those 737 Max “headwind$” … (Oh, iffin’ they were actually flying on those Dec 2019 “tailwind$” you kept pro$elytizing endle$$ly & coming $oon!)

    Reuters |MON MAR 9, 2020

    World $tocks toppled by coronaviru$ $hock, oil price cra$h.

    By Wayne Cole

    REUTERS / ATHIT PERAWONGMETHA

    SYDNEY (Reuters) – Global share markets tumbled on Monday as panicked investors fled headlong to bonds to hedge the economic trauma of the coronavirus, and oil plunged more than 30% after Saudi Arabia opened the taps in a price war with Russia.

    Saudi Arabia had stunned markets with plans to raise its production significantly after the collapse of OPEC’s supply cut agreement with Russia, a grab for market share reminiscent of a drive in 2014 that sent prices down by about two thirds.[O/R]

    The shock in oil was seismic as Brent crude LCOc1 futures slid $13.53 to $31.74 a barrel in chaotic trade, while U.S. crude CLc1 shed $13.45 to $27.83.[O/R]

    “Today’s price action puts at risk the fiscal health of the vast majority of sovereign producers and budget cuts and increased debt loads are now looming in the event of a prolonged period of low prices,” warned Helima Croft, head of global commodity strategy at RBC Capital Markets.

    “For the most politically and economically fragile producer states, the reckoning could be severe.”

    There were also worries that U.S. oil producers that had issued a lot of debt would be made uneconomic by the price drop.

  42. Looks like a bad storm is brewing to the southwest. Time to head into the tornado shelter and batten down the hatches.

    1. Coronavirus outbreak
      Panic hits global markets amid threat of coronavirus and oil price slump
      FTSE100 expected to fall 6.3% on opening on Monday after Asian shares are battered by growing fears of a worldwide recession
      Martin Farrer and Phillip Inman
      Mon 9 Mar 2020 02.25 EDT
      First published on
      Mon 9 Mar 2020 02.00 EDT

      Coronavirus outbreak: after heavy losses in Asia Pacific, London’s FTSE100 and Wall Street are braced for another frenzied day of trading on Monday.

      Stock markets in Europe and the United States are braced for their biggest falls since the 2008 financial crisis after the start of the trading week saw panic selling amid the double threat of a coronavirus-driven global recession and an oil-price war.

      The FTSE100 is projected to plunge by 6.3% when trading begins on Monday morning, while the Dow Jones industrial average is on course to lose 4.9% in New York.

      It follows huge losses on Asian markets on Monday where fears about the worsening worldwide economic slowdown were exacerbated by the shock decision by Saudi Arabia over the weekend to increase oil production in an attempt to drive competitors such as Russia and the US out of the market.

      The price of Brent crude oil fell nearly 30% to $21.14 on Monday, its biggest single fall since the start of the first Gulf war in 1991. Some experts predicted that it could fall even further unless the Saudis and Russians returned to the bargaining table.

      “I think all forecasts are out the window,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney. “It seems like a race to the bottom to secure order(s).”
      …

  44. CR8R porn in the US equities markets right now. S&P trading halted for 15 minutes.

    1. For once I agree with Elon Musk. The panic is overblown. Some investors are already starting to cover their shorts.

      2. We’ll see.

        If Lombardy-type quarantine measures are imposed in the U.S. then all bets are off.

  45. So much for “peak oil”.

    Chris Nelder probably pushing six packs across the counter at a 7-Eleven now.

  46. I remember my former boss and a co-worker both had their Schwab widgets on the desktop and a count-down calendar tinking downward. They’d be watching throughout the day just like sheep wondering when their turn to be shorn was coming.

  47. After trading restarted, Dow dropped more than 2,000. Then bounced back up. A minute ago it was -14XX, now -1578. Hope everybody strapped in tightly today!

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