Coronavirus Is Spreading Everywhere

I mentioned that on Tuesday, a member of Pelosi's inner circle told me that she's leaning towards shutting down Congress because of the pandemic. Remember-- members, may of whom are very old, sit in close proximity and then go out to every corner of the country to shake hands and then come back to sit in close proximity again. Yesterday the Times of London reported that "Parliament may be suspended for five months to prevent MPs from spreading coronavirus across the country. Britain edged closer to an epidemic yesterday with the biggest daily jump in cases leaving 87 people confirmed as infected. Three of the 36 new cases were intensive care patients who had not travelled recently, suggesting that the virus is already spreading more widely than thought in this country. King’s College Hospital in south London confirmed that two recent patients had tested positive. With public bodies boosting preparations for months of disruption, plans are being drawn up that would mean the Commons and Lords not returning after Easter. MPs rise on March 31 and sitting would be suspended until September in 'the longest summer recess we have known.'"

As we've been reporting for a week, Iranian government elites seem devastated by the pandemic, including at least two dozen members of the Majlis (their parliament) and more than another dozen top government officials, including Iraj Harirchi, the deputy health minister we've all seen coughing on TV, Masoumeh Ebtekar, a vice president, Mojtaba Zolnour, Chair of Parliament's National Security and Foreign Affairs Committee, as well as Mohammad Mirmohammadi, a top adviser-- now dead-- to Ayatollah Ali Khamenei, the supreme leader. Qom, the de facto seat of power appears to be the epicenter of the outbreak although there are victims in all 31 of the countries provinces. (Schools are closed, concerts and sporting events cancelled and Friday prayers have been banned until further notice.) Tehran, the biggest city, has over 1,500 reported cases. Non-government experts estimate that the real number of cases in Iran is a minimum of 20,000 and as many as 50,000.

The situation in Italy is even worse, where just two Chinese tourists in Rome have led to around 4,000 cases spread throughout the whole country and at least 150 deaths! All schools and universities have been closed. The country's tourist industry has basically ended for now. Austria has ended all train travel between the two countries. Other countries are quarantining all Alitalia passengers as are passengers on intra-European buses coming from Italy. Nearly 50 countries-- including the U.S. (New Hampshire), Mexico, France, Russia, Morocco, Germany, Spain, India, Israel, Andorra, Denmark, all 3 Baltic countries, Holland, New Zealand and the U.K-- have reported cases of coronavirus traced to contact with Italy.

The Trumpist regime-- remember, he only hires the best people-- has botched every single move along the way and yesterday Bloomberg News reported that they won’t be able to meet its promised timeline of having a million coronavirus tests available by the end of the week. Trumpist Senator Rick Scott (R-FL): "There won’t be a million people to get a test by the end of the week. It's way smaller than that."

Ambrose Evan-Pritchard of The Telegraph added that the Fed's misjudged "pyrotechnics" may have brought us even closer to a deflationary bust "If you are going to fire a shock-and-awe bazooka for psychological impact, you must be sure of hitting your mark. The US Federal Reserve has just failed to do this in a spectacular fashion. The first emergency rate cut since the Lehman crisis has precipitated a further slide in 10-year US Treasury yields to unprecedented depths below 1pc, taking the whole sovereign universe into uncharted waters. Are bond markets pricing in a global deflationary bust or just the price distortion of QE a l'outrance ? Take your pick. But note that real yields out to thirty years have crashed deeper into negative territory. The Wicksellian natural rate of interest is falling faster than the Fed can keep up and in doing so it is automatically tightening financial conditions...

We may now be an even more dangerous monetary world. The Fed is closer to policy exhaustion without having achieved anything. It has just two or three cuts left before it hits the floor, given that negative rates in the US are ruled out by the structure of the money market industry. In fairness, the Powell Fed was damned if it did, and damned if it didn’t. The coronavirus amounts to an economic ‘sudden stop’ across the northern hemisphere, likely to hit regions making up 70% of global GDP by mid-March. It is an exogenous shock akin to the outbreak of world war-- a 'once in 100 years catastrophic event' in the words of Ray Dalio from the giant hedge fund Bridgewater-- and it is colliding with global debt ratios at an all-time high of 322pc of GDP, and doing so at a vulnerable point in the business cycle."