Tag Archives: Wuhan Coronavirus

The Cost of Covid-19 Quarantine: Would You Be Financially Prepared? by Daisy Luther

Say the Covid-19 coronavirus comes to the US with the same fury with which it’s hit China. Would you be prepared, particularly financially prepared? From Daisy Luther at theorganicprepper.com:

As the world tries frantically to contain a rapidly spreading outbreak of Covid-19, schools, public venues, tourist attractions, and workplaces are being closed in an attempt to keep even more people from contracting the illness. Quarantines and self-isolation protocols are also being instituted across the globe for those who may have been exposed.

Of course, everyone knows that millions of people in China have been in lockdown for more than a month. People are told to stay home, many businesses have ceased to operate, and Chinese New Year celebrations simply didn’t happen this year. China’s debts are all coming due now, at the worst possible time as the financial loss for the country has been astronomical. For example, car sales are down 92% and Lunar New Year celebrations and travel that usually earn a billion dollars were canceled.

And that tourism hit affects far more than just China. In 2017, Chinese outbound tourists spent $258 billion around the world. The airline industry is bracing for a $29 billion dollar hit. All in all, this virus could end up costing the global economy more than 1.1 trillion dollars, a number that is practically unfathomable.

While the numbers cited here are outrageously large, obviously, these losses aren’t only going to affect “the economy” and “the businesses.” They’re going to have devastating effects on normal folks who just want to go to work, pay their bills, and keep living their lives normally.

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No Weapon Left Behind: The American Hybrid War on China, by Pepe Escobar

The US government is doing everything it can to kick the Chinese while they’re down. From Pepe Escobar at strategic-culture.org:

The New Silk Roads – or Belt and Road Initiative (BRI) – were launched by President Xi Jinping in 2013, first in Central Asia (Nur-Sultan) and then Southeast Asia (Jakarta).

One year later, the Chinese economy overtook the U.S. on a PPP basis. Inexorably, year after year since the start of the millennium, the U.S. share of the global economy shrinks while China’s increases.

China is already the key hub of the global economy and the leading trade partner of nearly 130 nations.

While the U.S. economy is hollowed out, and the casino financing of the U.S. government – repo markets and all – reads as a dystopian nightmare, the civilization-state steps ahead in myriad areas of technological research, not least because of Made in China 2025.

China largely beats the U.S. on patent filings and produces at least 8 times as many STEM graduates a year than the U.S., earning the status of top contributor to global science.

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China Forced To Revise Number Of Virus Cases Sharply Higher After Hubei Caught Undercounting New Infections, by Tyler Durden

Zero Hedge has been bearish on the coronavirus (meaning things are going to get much worse). I post both the bear and bull (meaning the whole thing is way overblown) cases because the experts are all over the lot, and I don’t trust anybody’s statistics. From Tyler Durden at zerohedge.com:

China’s desperate attempts to manipulate coronavirus “data” lower to ease public fears about a runaway pandemic and get more people back to work, are crossing into the outright laughable, if not surreal.

As a reminder, earlier this week, China’s Hubei province where the quarantined epicenter of the covid-19 epidemic, Wuhan, is located, once again changed the definition of a coronavirus “infection” in pursuit of a lower number of new cases by defining a case as “confirmed” if it stems from a positive result in a nucleic acid test, not if it was clinically diagnosed by physicians, a reversal of the definition change it adopted just  a week earlier which resulted in the biggest daily increase yet, when nearly 15,000 new cases were reported. Sure enough, this led to a plunge in new cases, with Hubei reporting just 411 new cases on Thursday and 349 new cases on Friday, sharply lower from the 1,000+ cases reported on previous days.

There is just one problem: at the same time as Hubei was priding itself in its sharp drop off in “confirmed” cases (carefully ‘doctored’ definition of new cases notwithstanding), a new breakout was been observed in the local Hubei prison system. And, problematically, for the brand new leadership of the Hubei Health Commission, it appeared that none of these cases were actually accounted for in the official province-level data.

Oops.

China’s Debts are Coming Due at the Worst Possible Time, by MN Gordon

For those with too much debt, they invariably come due at the worst possible time. From MN Gordon at economicprism.com:

The economic consequences of coronavirus are quickly piling up like garbage along the streets of Los Angeles.  Breaking supply chains, closed Chinese factories, iPhone disruptions, and massive shortages of Chinese made products.  These developments will most definitely get worse before they get better.

The economic impacts will be devastating.  As China flatlines, and first quarter GDP growth approaches zero, the global economy, including the U.S., will also be greatly disrupted.  Perhaps many low-cost, Made in China products will go on indefinite hiatus.  What then?

Quite frankly, the global economy’s overdue for a synchronized downturn.  Coronavirus may mark the turning point.  But it would have arrived sooner or later, with or without the threat of a burgeoning pandemic.

Still, the prospect of a great plague makes people all the more excitable.  A run-of-the-mill recession and bear market is one thing.  But add the rapid spread of a hyper contagious virus to the mix, and the human animal is inclined to go mad in unison.

In the meantime, and despite yesterday’s moderate selloff, the major U.S. stock market indexes are near record highs.  The expectation of ever more Fed intervention has pacified investors.  But that’s not all…

The yield on the 10-Year Treasury note has slid down to 1.50 percent; near the lower limit of the federal funds rate, which is currently between 1.5 and 1.75 percent.  In other words, the Fed’s next policy move has already been decided by Treasury investors.  Similarly, gold investors, which have pushed the price of gold above $1,620 per ounce, have also preempted the Fed.

But what’s really going on?  Moreover, should you panic, yet?

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Coronavirus – The Decline Of New Cases Continues – Economic Ripples Begin To Emerge, by Moon of Alabama

If Chinese government figures are to be believed (a big if), the coronavirus has already peaked in that country, although not the economic ramifications. From Moon of Alabama at moonofalabama.org:

China is making more progress in the fight against the novel coronavirus while other countries see increased problems. Meanwhile the global economic damage that the epidemic causes is slowly coming into view.

In our last discussion of the Coronavirus epidemic in China we criticized a statistical change made by the Chinese authorities:

The Chinese government has added a new category of infections to the total number of COVID-19 cases. So far there were two published categories. ‘Suspected cases’, which were people who may have come in contact with the virus and showed flu symptoms, and ‘confirmed cases’ of patients who fell ill and where the virus was found during tests. Now people who show signs of pneumonia will be added to the confirmed COVID-19 cases even when the tests do not find the nCov19 virus in their body.

The new count will thereby include a lot of people who simply have a common flu. That seems to make little sense.

Those who had fallen into the new category had a death rate that was much smaller than the original COVID-19 cases. That proved that a simple diagnose of pneumonia is not a reliable indicator for a nCoV19 virus infection.

Yesterday the Chinese authorities reversed their position. ‘Clinically diagnosed’ cases, people with only signs of pneumonia, are no longer included in the published numbers. This led to a drastic fall in new cases reported yesterday.

 

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The U.S. is the World Leader of Bio-Weapons Research, Production, and Use Against Mankind, by Gary D. Barnett

Who says the good old USA isn’t number one? From Gary D. Barnettt at lewrockwell.com:

Those that prevent disease and expose virus creation are heroic, but those that create and purposely spread disease and virus are inhuman. Given the history of the United States government and its military industrial complex concerning biological and germ warfare, the use of these agents against large populations, and the desire to create agents that are race specific strains, these powerful entities have become compassionless purveyors of death to the innocent. Manmade viruses meant for warfare, whether for economic destruction, starvation, or mass death, are the workings of the truly evil among us. Predation at this level is relegated to those in power; a president for example, could give the order to wipe out millions due to his inability to control a problem he caused and perpetuated, and then lay blame on the victims.

Who would ever have believed that modern warfare could be more brutal, more torturous, more painful, and more harmful to innocents, especially children, than past atrocities committed in war. Memories of millions sent to their deaths fighting in trenches, cities obliterated by atomic bombs, entire countries destroyed, and millions purposely left to starve in order to appease some tyrant or elected “leader.” I once thought that nuclear war would signal the end of life as we know it, but considering modern warfare and technology, I now think that uncontrolled and deadly viruses may consume the world population, as one after another poisons are released as acts of hidden war. There can be no end to this madness, as any retaliation in kind will result in the spread of worldwide disease; all created by man.

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Covid-19: Global Retrenchment Will Obliterate Sales, Profits and Yes, Big Tech, by Charles Hugh Smith

We’re just now seeing the economic effects of the coronavirus, but whether it’s truly a pandemic or an overblown scare fanned by governments and the media, those effects will be substantial. From Charles Hugh Smith at oftwominds.com:

If you think global demand will rebound as global debt and confidence implode, you better not be making consequential decisions based on Euphorestra-addled magical thinking.

Even before the Covid-19 pandemic, the global economy was slowing for two reasons: 1) everybody who can afford it already has it and 2) overcapacity. One word captures the end-of-the-cycle stagnation: saturation.

Everyone who can afford a smartphone (or can borrow to buy one) already has one. Everyone who can afford an auto loan already has a car. Everyone who could afford an overpriced house already bought one. Everyone who can afford a tablet or laptop already has one. And so on.

This saturation isn’t just in the consumer market–the corporate market is equally saturated. Corporations leased too much space, bought more cloud services than needed, increased headcount willy-nilly, and increased capacity just as the market for their goods and services stagnated from global saturation of markets and debt.

Paint-daubed members of the Keynesian Cargo Cult (paging Chief Humba-Humba Paul Krugman) love to claim that “debt doesn’t matter” but in their frenzied dance around the campfire they ignore one little feature of debt: interest. In a world in which money is borrowed into existence, all new money issuance and all new debt (the same thing) accrues interest.

And as Japan has proven, even if the interest rate is near-zero, if you borrow relentlessly enough, the interest due even on near-zero interest rates soon dominates your entire income.

The Keynesian Cargo Cult, busy with their rock radios (the dials are painted on), ignore the sad reality that marginal borrowers default because they can’t afford to make the principal payments, never mind the interest, and the inevitable result is cascading defaults throughout the financial system.

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