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American job losses explode; NY Fed doles out unprecedented financial support; recovering China faces export order drought; Covid-19 cases mushroom; UST 10yr yield at 0.78%; oil and gold hold; NZ$1 = 59.7 USc; TWI-5 = 66.5

American job losses explode; NY Fed doles out unprecedented financial support; recovering China faces export order drought; Covid-19 cases mushroom; UST 10yr yield at 0.78%; oil and gold hold; NZ$1 = 59.7 USc; TWI-5 = 66.5

Here's our summary of key economic events overnight that affect New Zealand, with news of some absolute stunning reversals today.

First up, there has been a stunning increase in claims for unemployment benefits in the US. We have previously suggested that there would be a huge spike up from 281,000 last week, itself a +30% jump from the prior week. A level approaching 2 mln was suggested. But the actual level of claims has come far, far higher at 3,283,000. And this may be understated as some state unemployment registration systems were overwhelmed with applicants. Given that the American middle class is the global engine of economic activity, we can't overstate the importance of this disaster. It has global implications and there will be global repercussions. There has never been as swift an economic shock in the world, ever.

Reinforcing the gravity, was a minor regional Fed survey, this time from the Kansas City Fed. It reported a very sharp drop in all factory measures in that district. New order levels dived. Firms are reporting they may have to shut down. It will be a story repeated nationwide.

So far today, the NY Fed has purchased US$159 bln in repo transactions, US$21 bln in mortgage backed securities, and US$45 bln in US Treasuries. That is US$225 bln in just one day. So far this week - yes, only the four days this week - the NY Fed buying has totalled more than US$1.1 tln in liquidity support, including more than US$¼ tln in US Treasuries, more than US$0.4 tln in mortgage-backed securities and more than US$0.4 tln in repo transactions. That is also the highest weekly level on 'unlimited' financial system support, ever. To put that weekly total in perspective, the US Congress has 'only' enacted fiscal support for the whole crisis of US$2 tln. Clearly, much, much more will be needed. States will need massive bailouts just to run their unemployment claims programs.

The American real estate markets is heading for a deep freeze. US mortgage rates fell.

Unbelievably, after all this wreckage, the equity markets are up strongly,  with the S&P500 up +4% so far today. European markets were up too, but less. Asian markets fell yesterday, and fell sharply in Tokyo yesterday, down -4.5%.

China says export orders will drop -30% in March. They may be being optimistic. This is a major threat to their employment levels. Stresses have been building for some time. In fact, balances in Chinese wealth management products fell -16% in 2019. They will have fallen far sharper in 2020 so far.

Job losses in Europe are mushrooming too.

In Australia, a regulator is increasingly concerned about the liquidity of their superannuation funds and is seeking data and reassurance they are still solvent from each of them. Even more fundamentally, S&P says it expects mortgage arrears will soar soon in Australia.


You get our daily news coverage free. Corporates are starting to pull advertising. That is a big problem for us. You enjoy reading our website, and I am asking you to Become a Supporter now. I personally want to say a big Thank You. (If you are already a Supporter, you're my hero.)


There are now more than 283 cases identified in New Zealand, with more than 78 new cases in the past 24 hours, including community transfer. Five are now hospitalised. Our officials now expect our caseload to rise into the thousands before we gain control. Even in lockdown and this data, we don't know how lucky we are.

Worldwide, the latest compilation of Covid-19 data is here. The global tally is now 495,000 of officially confirmed cases, more than doubling in a week. There are now 413,000 cases outside China and almost all of them are in five core countries. Italy is up +5000 from just yesterday morning's tally. The US is up 14,000 cases from the same time and now at just under 70,000 cases. Sadly however, case numbers in the rest of the world are shooting up, up to over 100,000 now. Australia now has 2810 cases, a rise +20% in one day. The official death toll is over 22,000 worldwide, but is probably much higher - as is the real infection rate.

The UST 10yr yield is soft again today at under 0.78% but it is quite volatile. Their 2-10 curve is still very positive at +51 bps and unchanged. Their 1-5 curve is more positive at +35 bps, while their 3m-10yr curve is still way out there at +87 bps. Short rates for UST bills have now turned negative. The Aussie Govt 10yr yield is now at 0.91% which is down -5 bps in a day. The China Govt 10yr is down -3 bps at 2.68%. The NZ Govt 10 yr yield is little-changed however at 1.10%.

Gold is up again today, up +US18 at US$1,632/oz.

US oil prices are down sharply today to under US$23/bbl and the Brent benchmark is also sharply lower at just over US$26/bbl. Both represent drops of almost -US$2/bbl. Prices are dropping because there is nowhere to store the oil being produced as demand crashes.

The Kiwi dollar is starting today much firmer than this time yesterday as the greenback takes a hammering, now at 59.7 USc and up +1½c. On the cross rates however we are up +1c at 98.5 AUc. Against the euro we are also up +½c at 54.2 euro cents. That means our TWI-5 is up to 66.5 and its highest in more than a week.

Bitcoin is now at US$6,679 and little-changed. The bitcoin rate is charted in the exchange rate set below.

The easiest place to stay up with event risk today is by following our Economic Calendar here ».

Our exchange rate chart is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

186 Comments

15
up

Thanks David. I wondered perhaps your supporters could get a little "supporter" badge or symbol beside their names on their post comments to show their contribution.

Maybe in gradients... the old bronze silver gold since the Olympics dont need them.this year. That might help encourage people.

Good idea that will help us spot the Real Estate Agents ;)

Ha. They claim their bets at the greyhounds as deductible, so im sure theyll find a way to make this work for them.

How do you figure that CJ099?

“probably much higher - as is the real infection rate” sadly that is a contender for the understatement of the year and likely to be a clear winner. The Chinese were set up by their very regime to impose martial law, rigorously, effectively region by region. Not so elsewhere particularly the USA where Wuhans are developing ad hoc, coast to coast. Just take a look at flight tracker, every plane will have carriers aboard.

Where are all the masks, hand sanitizer and associated PPE?

https://www.smh.com.au/national/chinese-backed-company-s-mission-to-sour...

https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medi...

Chinese Australians sabotaging their new country. Shows the obligations these immigrants have to Beijing.

Jian Yang ring a bell?

12
up

... and what do readers think of this? No sanitizer here but ZOONO a NZ company who have been lauded all over our media is shipping 1000 litre containers overseas.

https://i.stuff.co.nz/business/120571748/zoono-sanitiser-strikes-multimi...

Bear in mind they will be "essential services"

We ordered about $100 from them on the 4th March, confirmation came on the 5th. Still nothing.

In the article they "explain" they have no problem with large volumes but are struggling with small amounts. WTF?

I am contacting the NZ authorities on this as their first priority has to be NZ.

Curious as Zoono advertise 4 lt containers, as well as individual dispensers?

Paul Hislop is the guy controlling ZOONO

Has had a chequered past.

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio...

Yep, New Zealand is in a state of emergency.
emergency powers now in place would seem to set priorities.
Post how you get on.

14
up

yes the DHB's have been telling us NGO health providers for weeks now they have it just let them know but several weeks later no actual supplies -- even with our full pandemic kits and what we have been able to purchase/ make we wont last another two weeks -

meanwhile their staff turn up in full hazmat suits - then refuse to come to our working environments because they are unsafe! There are huge number of healthcare workers who work in the NGO and Private sector -whom MOH / DHB /ACC and other funding bodies are treating appallingly at the moment - yet if our staff walk off -- the DHB will have thousands of people living in 24/7 support services on their doorstep

Sort it out Jacinda - get PPE to the actual frontline staff now instead of your global grandstanding -and presidential style addresses- we have been telling you for wellover a month to shut borders and put in place restrictions to prevent this --50,000 people a day were flying in - and the only check was a paper they had to fill in --

Just like Kiwi build talking and doing are very different things

Easy to blame Jacinda, but this is a systemic problem. 40 years of underfunding the health sector and a market approach/corresponding lack of central planning in what is an essential public service. Chickens are coming home to roost. My daughter is on the front line at Waikato hospital, so I don't speak of these things lightly.

Was listening to some discussion of the recent asset audit across the health sector. Bit dire. Like councils, seems to have been a case of having to defer maintenance because people don't like tax/rates and someone else can live with those consequences down the line...

Part of the problem with councils surely is that they morphed themselves into “corporates” with all the bells and whistles and grandiose schemes of the vainglorious at the expense of basic services and the requisite maintenance. Have yet to understand why the Regional Councils needed to be introduced. What exactly was going wrong that necessitated that? Now seems to be just another layer of bureaucracy to clip the ticket and argue with local councils and ratepayers alike. But convenient though in terms of demarcation of actual responsibilities out in the field.

not for one moment arguing its not been systemic and by all governments-- but when you start announcing 8 9 12 15 billion packages and only 500 mill to the health service during a pandemic health crisis - its simply insulting to everyone who works their ass off in an industry that has been underfunded undervalued and underpaid for decades - Now that is her captains call -- and right now whatever is in teh past is history - if she can find it for the unemployed, beneficiaries companies that have been making huge profits for years - she can find it for healthcare and healthcare workers who are daily exposing themselves to this virus.

Kpnuts - do you recall the coalition coming to power and saying the DHBs were basically knackered. I have a pet dog that could run a surplus by not doing anything. Dr Death as he was known in the medical profession, ex National Health Minister, Jonathan Coleman of the Birkenhead electorate, got asked a whole bunch of awkward questions which he promptly answered by resigning and heading off to a cushy job.

Agree that sounds really poor

China is for Chinese & vice versa, what you described mostly the CCP agents which largely been shipped worldwide through channel of land/properties accusation, The East know how to exploit the greed Western capitalist philosophy to their own advantage in today's game.

The last 15 years since China's massive rise has been a greed orgy on both sides of the ledger

There's also a 7-10 day lag between detection and death so be these stats are going to get much worse very quickly. I think the US was at around 18k cases last Friday and will probably be nudging 85-90k by days end.

12
up

"Huge unemployment figures, guys! Buy, Buy, Buy! There's more stimulus coming!"
But just as likely:
"Buy for any reason, guys. It's the 27th and we don't get the bonus' calculated until next Tuesday. It could be our very last one"

We are witnessing are the Death Throes of the markets we have become so used to for all of our lifetimes. I have no idea how big the damage that is being caused at the moment is in an effort to keep The System in some sort of operation order, but it's massive; beyond my imagination.
Repairing/repaying the cost of all of this sudden carnage is going to require a different set of rules. What they are we'll find out in due course. But what we have today, isn't it.

If this correlation continues, the whole US will be out of work, but DOW 100,000!

23
up

I’ll be fascinated too see how long these massive injections of liquidity can artificially prop up shares prices while the real economy craters.

A lot of the impacts we are seeing now are the result of countries going into lockdown and impacting their domestic economy. But as lockdowns expand across the globe, and extend longer than anticipated, the cumulative impact of these domestic slowdowns will have a ripple effect on global trade

yes
its all well and good having paper stuffed in the cabinet going through the roof …
but if theres no stuff or jobs

'Here’s the thing. Given that a share of stock is a claim on decades and decades of discounted future cash flows, even entirely wiping the first year or two of cash flows does very little to the value of all those remaining cash flows.

But value that very long-term stream of future cash flows at extreme prices that imply zero returns, and even a modest increase in the expected return demanded by investors will trigger breathtaking losses.

That’s exactly what happened last month. When it comes to the financial markets, we don’t even need to talk our public health crisis, or build scenarios around it. We all just need to understand what the word “investment” actually means.

As I noted in February, “I continue to expect the S&P 500 to lose about two-thirds of its value over the coming years. Avoiding profound market losses over the completion of this cycle would require a permanently high plateau in valuations, at their present hypervalued extremes, and the absence of even one episode of significant risk-aversion in the future.”

What we’re seeing today in the financial markets is just an initial episode of significant risk aversion.'

https://www.hussmanfunds.com/comment/mc200326/

https://i2.wp.com/alhambrapartners.com/wp-content/uploads/2020/03/ABOOK-...

What happens when value virtually disappears from any listed stock? It either ceased to trade or....there's a Stock Consolidation. 1 new share for every 10 old ones you held, or 100, or 1,000. The shares live on at a vastly diluted new value.

Now that there has been a small bounce should I change my KiwiSaver from Growth to Cash do you think?

It may depend on when your provider rebalances their books. If they do changes on an individual basis - just you, and that means they have to 'sell' your share of stocks they hold to rebalance their books - then yes. But many will not do that. They'll wait until either - they have enough mass to sell/buy a marketable parcel or at some fixed time eg; the end of each month.
So 'giving notice' today may or may not do what you want it to do. Ask them!

"A return rate of less than 7.25 per cent will trigger higher payment (costs) for the local governments and school districts with pensions (schemes) "
That's what an environment of low-interest rats will do to you. The alternative, of course, is to cut existing pension payments....

'With 3M USD Libor rising for the 10th straight session as the benchmark fixed higher by 10.763bp on Thursday, the persistent increases in the London interbank offered rate "may suggest a widening gulf between those who have cheap access to funding and those who do not" - in other words, one or more banks may be scrambling for liquidity, and worse, someone is aware of this.

As a result, according to NatWest markets strategists John Roberts and Blake Gwinn, "a wedge may start to grow between Libor panel banks and broader commercial paper markets." To wit: Libor-OIS has now blown out to 130bp, the widest since December 2008, from 118bp prior session, suggesting that despite all the Fed's best efforts something remains badly broken in the interbank plumbing.

https://www.zerohedge.com/markets/bizarre-rise-libor-prompts-questions-a...

The 3mth TED spread widened out to 135.

Moreover, dealers were securing US Treasury collateral via reverse repo (RRP) from the Fed's SOMA at zero percent cash cost to the Fed while 3 mth UST Bills trade at -0.09% - graphic evidence.

Where do we go? Watched last 2 guests at the keizer report, but that was confusing. I presume it's not going to be pretty.

11
up

For those who would have otherwise died in car accidents this virus will have been a very fortunate occurrence. The lockdown for a month should save 20-30 lives.

Everyone should try to stay as safe as possible. Avoid climbing ladders at home and doing anything that may result in a hospital visit. Avoid hospitals like the plague!

Not to mention the 5% of Kiwis that would have died had we not gone into lockdown (including 3% of younger adults). We might have gone early enough to avoid hospitals being overwhelmed in two weeks, but it will be touch-and-go.

Time to be proud of little NZ. Scotty from Marketting spent a lot of Wed explaining how in his partial Claytons lockdown hairdressers could only spend 30 min with a client.

He also said every job is essential. WTF

https://www.google.com/amp/s/amp.news.com.au/lifestyle/health/health-pro...

https://www.google.com/amp/s/www.dailymail.co.uk/news/article-8146947/am...

A lot of shops remain open.there. Food courts too if they do takeaway. Tory govt with its business "ties" unable to do what is required.

Technically you could say he is right. Every job is essential to the person doing it.

But ultimately Oz are screwed. They are just not prepared, and don't really seem keen on trying.

Presumably their export sector is getting smashed especially their minerals

I think he believes in the Rapture.

It got past the sub-editors, did that one.

It was really 'rupture'.

I'm pretty sure we are shut down because Aliens are turning up, they came for our natural resources but 100 years too late. Now they are really pissed after 10 years getting here.

Not if they have a taste for human flesh.

Had enough resources to build faster than light travel, but ran out before they could develop instantaneous travel.

When the wash up is done, we will find out which countries did "better". The stats will show the deaths per GDP% drop etc etc. It is only a flu, not the Black Death.

The disproportionate number of US workers in service sector/gig economy was creating the potential for huge job losses in a recession. But what else can those people do?

Detroit nation wide?
I'm guessing, if they survive the virus, that there will be some big question marks on 'free trade' and out-sourced manufacturing.

Do you count some of the classical professions as being in that sector! Accountants, valuers, lawyers.

Valuers real estate agents definito

13
up

Business survival is being split between businesses that are 'nice to have' versus 'need to have'.
The service sector is going to take a disproportionate hit as NZ learns to live off less income. Less income because the big economies are hurting and global trade is going to take a hit. I know there is a real focus on this site about asset bubbles especially residential housing but the biggest bubble may turn out to be the tens and hundreds of thousands of service, entertainment,sports, recreational jobs created because as a country we could afford to borrow to pay for them.

But what else can those people do?
Pillage other's wealth.

Isn't that effectively what they already do. One way or another inserting themselves between a producer and end user and clipping the ticket.
I read about and commented on here a number of years ago about a study that pointed to a huge percentage of workers did absolutely nothing of actual value.

There's no value in anything really...wevare all workers and end users.

10
up

Will we see a stronger message today about "Bubbles"

You would think we have a 4 week public holiday with the amount of people out and about.

Police = Stay at home
Justice Minister = Stay at home
Health Minister = Stay at home
Prime Minister = Try and stay at home, but if you can't try and stay local, but if you can't, try and stay 2 metres away, but if you can't. Be nice.

saw heaps of traffic yesterday and this morning and people wandering around, and others in my area also commented on the same, one had a neighbor had a party the night of closing down.
the problem is 90% of the population will do the right thing 10% wont, time to harden up on that 10% maybe set up an interment camp on an island then they could wander around all they want and infect each other

I saw almost zero traffic.

Lockdown means lockdown.
Meaning It's hard enough to fight this when people are trying to do the right thing.

https://i.stuff.co.nz/national/health/coronavirus/120516059/coronavirus-...

More infections are feared as it emerges that hundreds of delegates were given the go-ahead by health officials to go on sightseeing trips around the New Zealand despite an attendee falling sick with coronavirus after his return to Australia.

One may not be a crisis manager.
New Zealand needs be crystal on this, it's the essence of lockdown.

Better PM say mask up. Stay at home and make masks, Masks for essential services workers. Supermarket workers thank you when you wear a mask.

We need make the lockdown work because of the state of pre planning, resourcing, stock of pills.

"state of pre planning, resourcing" - the lack thereof....

actually it says clearly on the government health web site that "there is no clinical evidence that masks are effective in the public arena""

I'd wear ski goggles if I were to wear a mask

'"there is no clinical evidence that masks are effective in the public arena"

That is just a marketing sound bite.

What does it really mean?

'No clinical evidence' - What studies are they quoting?
'Masks are (not) effective.' - Are they saying 100% not effective for stopping you from getting it, or stopping you from passing it on?
'Public arena' - No difference from using them in on crowded buses to less crowded supermarkets?

Also can wearing them make people feel they are doing some good so lowers anxiety, or does it make them feel good and lulls them into a false sense of security so they end up exposing themselves to more real risk?

an interesting article in the SMH this morning about Chinese companies in Australia sourcing as much medical supplies as possible and flying to china leaving Australia potentially short.
we manufacture heaps of food in NZ but most of our manufactures are now owned offshore, im not saying this could or would happen but in the future if we had a situation where the country that owns this places direct them send it all what would our government do? would they nationalize those industries because some countries would
https://www.smh.com.au/national/second-developer-flies-82-tonnes-of-medi...
"The chartered plane with 90 tons (82 tonnes) of medical supplies, including 100,000 most needed protective coveralls and 900,000 pairs of medical gloves, has successfully departed from Sydney and arrived in Wuhan on 24 Feb"

10
up

Which part that is difficult to understand? China is for Chinese supporters, and vice-versa. The rest of the world are they customer/or their servant.

KO, here is something for you.
The first part, points to how middle America may be mulling over all things China.

https://youtu.be/j1fr9qIBm6A

Yes, whether they are pro CCP or anti, expat Chinese have relatives at home who the CCP can use as a lever. However I would say that in the overall scheme of things this sending of PPE gear will now be banned. A one off abhorrence. And to be fair Jack Ma has send a few to some other countries: guilty conscience maybe?

Well, Alibaba is serving a market of more than just China. Goodwill to protect his brand.

All those comments that used to be on NBR along the lines of "What does it matter who owns the land / production etc? We can still legislate over it" are looking a bit naive. For years people have been pointing out that food security is going to be a massive issue this century.

I'd always felt "the meeting place of intelligent business" was a bit of a stretch...

https://brrr.money sums up the response nicely.

Gezz, such a DGM input Dave... what to say? we're just into second day of lock-down, in which? most of us. Started to use some idle time to re-arrange our piggy banks, to anticipate the end of lock-down.. then burst quickly to buy those properties once lock-down ends... before the prices goes up again, every lock-down will ensure the holding pattern of prices, before it's release up. This is a natural process as we're holding up our breath.. after body cannot hold any longer, then immediate exhale+inhale air.. same to RE.. a burst of prices up.

"Most of us" who still have jobs? I'd wait for this quarter's unemployment stats before you go firming up too many plans about real estate.

It's not just RE Agents that are going to after what money there is either! It'll be car yards; retailers of every kind; hotels and bars; restaurants; tourist providers etc etc etc.
They'll all want what dollars we have left after X weeks of no sales, and will all cut each other's throats to get it. That's how the inhalation of air is going to be released..."Isolation Over Sale!!' and much lower prices, for everything, in the offing.

Yep, there will be a recession. No other result is possible. People will be much more careful with what they do with discretionary dollars (if they have any).

Haa GV, same like you.. still have job, unlike the RE moguls that I treated on their death bed. I just realised on this site, the bull/spruikers always carry the same tone, whatever the circumstances. Despite the obvious, so anyone with basic intelligent will do so just that.. go on, stop chitty chatter.. just do it, jump already now.. it's too big to fail mentality, because in the end? general tax payers will foot on the bill. Govt bail out.

Good luck with that theory...will stay renting untill some sort of normality returns, if it ever will?

The implosion in the US can only get much worse. Congress's tardiness will be in part due to the endemic corruption where they are trying to find ways to ensure the prime beneficiaries of any support will be the rich and powerful. While as DC outs it, the middle class are the 'global engine of the economy' they will get shafted as they did in the GFC and by the free markets. the best they can hopefore will be crumbs. It'll be interesting to see commentary from Biden et al v Trump.

Rather die than crash the economy? What if events step you so far outside the existing models that death seems to be the only option? What is happening now is really putting the spotlight on the failures of capitalism, so a fundamental rethink is required. The "reset" that Mr Mauldin refers to.

Trump can't do it without taking Congress and the senate along too. What if they don't want to play?

The States is in it's death throws.

Yes
Very interesting as you are out walking in the neighbourhood.There are a lot of families out walking and at times the narrow footpath is getting very full of people.
Just as well there are few cars about as we try and move to the road to keep our distance
Feel sorry for those living in large apartment blocks they have to negotiate hallways and lifts as well

I'm stunned by the depth of #coronavirus information being released in #Singapore. On this website you can see every known infection case, where the person lives and works, which hospital they got admitted to, and the network topology of carriers, all laid out on a time-series Link

The same could be done here.

If not, why not.

Current list of NZ Covid19 cases. Location, sources etc

https://i.stuff.co.nz/national/health/coronavirus/120105345/coronavirus-...

Yep, no street view x time date stamp.

New prediction, CV is not much worse than a bad influenza season. Note that this is the same person that authored the Oxford study that so many countries have based their quarantines upon.

An aside, I've also recently seen a quote from a statistician that said that CV in general, doubles your risk of dying over the next two months. For young and healthy people, that is a very small increase in risk. For the very old, and those with significant health issues, that is a larger increase in risk.

https://www.dailywire.com/news/epidemiologist-behind-highly-cited-corona...

Also note that there are several countries that went on with business as normal with quarantining only high risk people as well as people with symptoms. South Korea is already showing signs of herd immunity, their active infections number has been declining for nearly two weeks. Japan and Sweden have also adopted this approach but are far earlier on the curve.

There will be many papers written about how the world reacted to this virus. I worry about the boy who cried wolf syndrome applying in the future.

Why would we compare it to a 'bad flu season' when CV is not the flu?
Perhaps comparing it to Ebola would be better? Or AIDS? Yes, the expected mortality rate is low - at the moment.
Those, too, were ignored at first. But I doubt we'd do that today.
Besides, 'better safe than sorry! '

bw,

Maybe you did not go to the link and read the article. The last bit on the article for your reading pleasure.

Professor Gupta led a team of researchers at Oxford in a modeling study which suggests that the virus has been invisibly spreading for at least a month earlier than suspected, concluding that as many as half of the people in the United Kingdom have already been infected by COVID-19.

If her model is accurate, fewer than one in a thousand who’ve been infected with COVID-19 become sick enough to need hospitalization, leaving the vast majority with mild cases or free of symptoms.

In other words, Ferguson’s highly influential initial model was off by orders of magnitude.

Epidemiologist [Ferguson] Behind Highly-Cited Coronavirus Model Drastically Downgrades Projection

https://www.dailywire.com/news/epidemiologist-behind-highly-cited-corona...

Yes, same article as linked in my comment above.

The model is clearly wrong and has been discredited, comparison to the testing vs positive results as well as scaling the Italian results (which implies over 100% of Italians have had the infection) clearly shows it's incorrect.

"...Levitt said. For instance, the Diamond Princess data allowed him to estimate that being exposed to the new coronavirus doubles a person’s risk of dying in the next two months. Most people have an extremely low risk of death in a two-month period, so that risk remains extremely low even when doubled."
Though the chance of dying by suicide has shot up.
https://www.latimes.com/science/story/2020-03-22/coronavirus-outbreak-no...

Thanks for that... forgot where that little tidbit came from. Interesting about his prediction for China back in February. Either Levitt was remarkably prescient, or China targeted his estimate. China has since crept up a wee bit on the numbers, but still reasonably close to his estimate.

This came out a week ago.

https://www.scotsman.com/read-this/covid-19-not-considered-high-conseque...

The UK government no longer classifies coronavirus as a High Consequence Infectious Disease (HCID), but this doesn't mean it's safe to resume normal life quite yet.

In January 2020, public health officials in the UK designated Covid-19 a HCID, using the information they had access to in the early stages of the country's outbreak.

However, the experts have now reconsidered that definition and, as of 19 March 2020, Covid-19 is no longer considered to be a HCID.

The caution with the Levitt/Diamond Princess data is that the Diamond Princess had a fully functioning medical system backing it up which obviously would have greatly assisted survivors.

The interesting stat for me from the D Princess is "Out of 3,711 people on board, 712 were infected, and eight died." Seems a low rate of infection given the crew/passengers had it for a long time before diagnosis on the ship/petri-dish. Also a lot of people with Covid didn't show symptoms - see link.

"Adjusting for delay from confirmation-to-death, we estimated case and infection fatality ratios (CFR, IFR) for COVID-19 on the Diamond Princess ship as 2.3% (0.75%–5.3%) and 1.2% (0.38–2.7%). Comparing deaths onboard with expected deaths based on naive CFR estimates using China data, we estimate IFR and CFR in China to be 0.5% (95% CI: 0.2–1.2%) and 1.1% (95% CI: 0.3–2.4%) respectively."
https://www.medrxiv.org/content/10.1101/2020.03.05.20031773v2.full.pdf

I'm trying to reconcile this kind of idea with the experiences we've heard from hospitals in Italy and China that were overwhelmed, with countries resorting to building or repurposing buildings as emergency hospitals. I work in a DHB and we are taking it very seriously and preparing for a similar influx.

Perhaps Italy has a particularly old population, but I don't think dramatically different to the UK, and certainly the UK would be older than China on average.

Perhaps the disease is not much more deadly than flu but much more contagious leading to a huge peak of 'flu-like' morbidity and mortality, like a highly compressed flu season? This is my current thinking, although I haven't fully convinced myself. Edit: the lack of any resistance to the disease will presumably be acting to increase the rate of spread compared to returning flu viruses

This would still require serious measures (perhaps not as serious as we are currently undertaking, but we don't have many other experiences to draw on yet) to avoid overwhelming the health system, but may mean that things are over, or at least manageable, rather quicker than originally feared.

The comparison is not between the viruses but between the impacts. More CREDIBLE research is coming out suggesting that the mortality rates have been vastly exaggerated.
I still hold the view that the costs of the response are going to be far higher than the benefits.

I've been saying for a month that primary effect on the world is via economic dislocation due to the various countries responses. It appears that a few countries, including Japan, South Korea, and Sweden, are following a very different approach to minimizing the effects of CV.

Yep me too. And copped plenty of abuse for that view.

Gotta love that new unemployment filing rate in the US. In recent months it has been around 250,000 per week. This week it is 3,283,000. That'll buff right out... not!

Yuuuge numbers, Treemendous numbers

chynah chynah chynah - we love chynah - chynah is the best - we're beating chynah

Big numbers...no one has bigger numbers....great job

Think of the potential rise in unemployment in NZ and the impact on the economy ...

That is absolutely huge if true, of enormous consequences!!! So basically we are ruining ourselves for very little reason?

Wow the Herald has searched far and wide and found in Australia someone to praise Jacinda Ardern.

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12320229

Bear in mind about 10 days ago in Parliament Ximon got up and said that JA's main priority was to keep kiwis in work. Jacinda in her reply stated that No Ximon, her priority was to keep them alive. I showed the link when I posted this previously.
I firmly believe that if we had a Tory govt they would have blindly followed SFM.

Australia is heading down an ungodly path.

We watched Jacinda's chat this morning. No studio, no film crew, no monitors etc. She looked like she had just got up, with the baby having woken up a few times as well. She looked like she was wearing her 'jamies and sweat shirt on top. She will get just under 100% of the vote in the election if this carries on.

Is anyone talking about US pension schemes and the likelihood of defaults?

As usual hysteria and emotive reaction by MSM aimed at "the herd" and the reduced ability by those not able to milk them as per normal. Only 2 in my house and no rest for us, my wife manages disability care homes, no rest for her, but she is in a bubble where the service users are more or less isolated normally, most risk from other workers coming and going. Myself, fertiliser application, which is an official permitted activity as it cannot be deferred and has virtually zero contact with others to do it. Many others will have similar working setups where not much needs to change. I guess now we see how "essential" all those towers full of battery farmed warm bodies and the camp followers really are.

Realise that you are temporary too - applying a finite resource to food.

Bullsh*t is fertiliser. And while not infinite, it's all over the place.

True that, permitted, but probably not essential and finite for sure, it's not my life's work. My main points were aimed at over-active reporting with fixation on infections, deaths and the economic impacts. Emotive showcasing of distressed individuals whose elderly relatives have succumbed to this as opposed to any other of gazillions of other possible causes and hand wringing over businesses who had no plan for just such an event, predictable or not. All humans will likely experience this infection, slowing the spread is a good idea to ease the burden short term, but longer term no more will die from this than from a bunch of other things already out there. But "the herd", which needs to be kept fearful to be managed, also demands that "things are done", and the current lockdown is one of those things, coincidentally bringing to point that almost all that they do is unnecessary because they can take a month off and it doesn't change much.

I see Zorro at Westpac is forecasting economic activity will drop a third during the lockdown.
Once again, I think he will be wrong. I would wager at least 50-60%.

"Westpac forecasts unemployment will climb by 200,000"

I have no idea how he thinks activity will only drop by a third, with so much closed down.
Even for those of us working from home, the general word among my acquaintances and friends is we will be doing well to be productive 50% of the time.

Especially if you are looking after children too

This story will run.
Introducing "underlying psychological disorder"

https://i.stuff.co.nz/national/christchurch-shooting/120601692/why-did-t...

10
up

Don't give it anymore air time please.
And no relevance to this site.

China just banned all foreign nationals (including those who hold a valid Chinese residence permit) from entering the country. No matter how CCP spins the propaganda wheel, the risk of getting the second wave is real and high.

13
up

I wish the Chinese Ambassador had gone back to China to prove how safe it was there after emploring the NZ govt to allow free movement! And being stuck there :)

Has anyone tried to break a term deposit recently? I was wondering how the banks view this at the moment. I know that the rules were changed recently that you have to give 28 days notice or something, but are they saying yes? This will be telling.

Firstly. Why would you want to break a Term Deposit? It's almost certain you won't get an investment rate to match it now? And if (2) you need the funds on a hardship basis - any bank will give it to you ASAP if you ask. Like as not ( Rabobank made an announcement about this the other day - no penalties etc) they'll just do it anyway. ASK THEM!
(NB: There is probably no safer place on the planet at the moment than New Zealand, and no safer place for any funds than in a deposit account of any term with an RBNZ authorised bank. Who knows what the price of any other asset you may think is 'safer' will be after this. One way or another, those deposit funds will be worth what they are today. If not - it won't matter anyway!)

He wants to invest in stocks and shares and pick up companies on sale.

IF they are companies that survive it could end up safer than having NZ cash...who knows, at this point. Any investment is a risk and only some will be bailed out.

"Why would you want to break a Term Deposit?"

An example of a person's financial circumstances:
They expected to pay all their living expenses from their regular salary / weekly wage, and save some of the remainder.
They invested all their spare cash in a term deposit as it was not expected to be needed.
They just lost their job / income and now need the cash to pay their living costs - rent, etc.

I'm hearing a lot of freelance workers have lost most of their revenues - marriage celebrant, uber driver, massage therapists, spray tanning, nail technicians, private music teacher, baby sitter, etc
Also others - Airbnb, etc

On the good news front at least we will be able to go to to races after the lockdown. The government priorities of keeping tourism going until the bitter end, and now horse racing, have muddlin' through management written all over it.

Animals have to be fed and stalls mucked out, to do otherwise is nothing less than animal cruelty. Ditto with milking the dairy herd.

Or just Can 'em and feed to the dogs: my little terrier runs (skips?) on Kangaroo atm.....

Not sure teh demand for such things has increased enough to absorb the sudden supply shock.

This wasn't about welfare. Horses can be paddocked and cared for in a lockdown. This was more about political donors.
“And this will save a heap of jobs and potentially keep the whole game alive. We can continue to train the horses and have them ready to go when racing resumes."

https://www.lincolnfarms.co.nz/stories/racing-thrown-a-lifeline-as-train...

Hmm, fair enough, the training part of it does seem a bit of a handout to Winstons mates. God forbid that they can't throw money away on the old nags immediately after the lockdown lifts. I do wonder how much condition the horese would lose left to themselves in a paddock for a month.. can't see it being a huge amount really.

You can't really chuck a valuable racehorse out in the paddock, especially if it is fit and full of beans. The modern thoroughbred is an animal with a very poor sense of self preservation.

So..an expensive toy with built in self-destruct mechanisms?

Regarding how the timing of our lockdown compares to other countries check out this image from the FT.

https://mobile.twitter.com/jburnmurdoch/status/1242951459622223873/photo/1

The UK for example shut down (not to the same extent initially, bit better now,) after 335 deaths. Italy 800. We shut down ALMOST TOTALLY before any

"Given that the American middle class is the global engine of economic activity"

No it isn't. Mr Chaston.

It may well be the biggest sector in terms of consuming crap, but that is a very different - and temporary - thing.

Not disagreeing, but interested in your logic - Really? Don't they provide the largest numbers of workers, and therefore ultimately the largest group of consumers? This would tie to DCs comment?

Nope. They are a 'service economy'- so are parasitic on real work (real energy doing real work producing real stuff). That's done by China and others.

I don't rate workers as consumers a lot - debt-spenders are the more likely cohort to monitor. And they've been a bubble in the making for a decade. Or more.

The bigger question is how the trillions of QE fit into the long game, and Weimar Germany circa 1922 comes to mind........ Heck, Trump and von Papen - there are some similarities :)

But the middle class must have incomes to be able to take on debt. They are not the wealthy. They have largely been conned by the banks to take on debt, especially in the US where political corruption is somewhat more overt. Thus they must be workers. The lower classes are largely trapped in the minimum wage jobs of the service economy (the modern slavery) while the middle class are a little better off but still workers and consumers in the biggest numbers?

Maybe this will help them organise and drive for better rights.

Agreed Rick. But what will it take for them to be heard? The political elites treat them like idiots, handing out alms and expecting them to feel grateful. I see the problem as a lust for power and privilege. My problem is I am a centrist not a socialist, and I fear that when the middle and lower classes are heard the swing will be too far left. Moderation in all things is preferred, but even on this blog we can see that the vast majority are extremists of some bent.

Agree...basically with all that. Centrism works where either extreme does not. And profession of either extreme is overly ambitious and tends to be philosophically inconsistent (rules for thee, not for me - at either extreme).

Fourteen people associated with a Queenstown cattle conference have now tested positive for covid-19, one of New Zealand's largest clusters of the disease.

More infections are feared as it emerges that hundreds of delegates were given the go-ahead by health officials to go on sightseeing trips around the New Zealand despite an attendee falling sick with coronavirus after his return to Australia.
Sigh - you would have thought after MBovis some lessons would have been learnt?

Herd instinct. His too, probably

Discharging passengers the Ruby Princess - given the lesson learnt from the Diamond Princess - should have been a no brainer. We had a PM telling us you couldn't pass Covid on if you didn't have symptoms - when positive Diamond Princess passengers showed no symptoms in February.

What we learnt from M. bovis, measles epidemic passed on to the islands, kiwibuild, the census, dropping immunization rates, myrtle rust disease...

https://www.medrxiv.org/content/10.1101/2020.03.05.20031773v2.full.pdf

AND DON'T IMPORT BULL SEMEN ON THE SIDE

...at least with MBovis we had the farmers using NAIT so could track movements... oh wait on, sorry me bad.

The same weekend as the cattle conference a pipe band was allowed in from Washington State - 20 people had already died from Covid in the State by that point. One has to wonder.

Chances are this leads to massive pressure to extend their social healthcare to everyone.

'A Word About the Horrid Spike in Unemployment Claims and Why it’s Even More Horrid Than it Appears'

https://wolfstreet.com/2020/03/25/self-employed-left-hanging-after-spani...

Question for all:
Are house cats a vector for the virus
Do they need be locked too?

I asked Gareth and he said yes.

During the SARS Hong Kongians were throwing them out of sky scrapers along with Fido. It was raining cats and dogs.

Apparently it's on again

https://www.google.com/amp/s/www.thesun.co.uk/news/10863349/coronavirus-...

Humans really are C*#%$

C19 will be already widespread in India, the official statistics largely a guess. Transmission rates will be high in its densely packed population and compliance with the lockdown variable, especially in rural areas. Food shortages in metropolitan areas are likely. This combination threatens to deliver a tragedy of catastrophic proportions.

Peak Prosperity guy.

https://youtu.be/7YN7aBiICz4

A shout-out from the always-amusing (and ex-Services) Kurt Schlichter, to the real heroes: the transport crews, medicos, food producers etc who actually Do Useful Stuff.

Our elite is full of self-important morons who contribute nothing but more dumb in a time when the only thing we have a surplus of is dumb. The real hero is the guy who trucks in a load of whole wheat bread, ribeyes, and low-priced cabernet to the Trader Joe’s, not the Prius-piloting sissy with a Maddow fetish who shops there. The people our elite laughed at, scoffed at, poked at, are the very people who are going to rescue us from the mess that same elite helped make.

And...

We had a paradise, and in paradise, you can indulge in silliness like multi-culti blather and meaningless virtue signaling. But things just got real. We have no time for that crap now. The elite who imagine themselves indispensable to the world that normal people built, run, and defend, are being revealed as useless and ridiculous just when things got serious. We won’t forget how much they suck when this ends.

'Westpac economist Dominick Stephens said he "didn't believe for a second" that the long term value of firms had fallen as far as sharemarket prices over the last few weeks.'

No, but perhaps even further?

Ha, good one. Wonder what post meltdown ROE rate Stephens used to determine his future value estimate.

.

Why the vitriol?

PMI's will drop, purchase orders are being revised Asia will also feel the impact of reduced future demand soon

Well we will soon know whether we are in a 1987 sharp crash that ultimately resumed into a massive bull run or we are seeing the start of a 1929 grinding depression and possibly future wars, if history is any guide

Government injecting trillions into the market is not going to fix this, the central banks have shot their load with near 0% interest rates worldwide, and the only tools left are to hide liquidity problems at the banks by changing reserve ratio rules and provided liquidity via the repo market, but this will not stem the tide if mortgage defaults rise - which are very very likely
Inevitably the real economy is suffering now, and unemployment is spiking very very quickly

I do not think central bank liquidity injections are infinite and will stem the tide of this recession, I'm hoping for a 1987 type correction for the next few years but also aware that it could get much much worse i.e. depression

We have to bear in mind that other countries are not getting backstopped by the government and unemployment is surging, we are lucky here in NZ - well, for the next few weeks anyway...

Not having a go but Re:"Inevitably the real economy is suffering now, and unemployment is spiking very very quickly", does it not imply that the "real economy" you refer to is not so real that it must continue to operate in order to supply the essentials of life and that the unemployment is as a result of "jobs" that are also unnecessary and intangible?

I get what you are saying, but you may not be aware of the spiking unemployment rates worldwide and massive adjustments in the business world, less income = more defaults and lower demand, this is going to hurt..

Already in the space of a week our household is taking a 40% drop in income, its not a train wreck - but it's certainly going to curtail spending for at least the next few months which will flow into the real economy, some people getting laid off are going down to 100% drop in income and dependent on state support, so you can't tell me lower income won't impact the real economy - it already is

For sure, but my view on GDP is that it only measures how much sloshing around is going on and is not related to how much of anything is actually produced, it serves only to satisfy those that need to produce ever increasing numbers to get elected.

Hi
Just a few points. A relation manages a professional practice where the average salary is in excess of 500k. They applied for wage relief and had 28k in the bank next morning. Huh! Re today’s 1pm update: 378 cases, one person in icu. At the moment, the cost-benefit ratio of the lockdown is somewhat out of whack. As to essential services, at the end of this public servants making the decisions as to who can and can’t work will still have their feather bedded jobs, as will the police. Surely extremely low/ non-risk businesses and services could be allowed to operate, too. A huge knock-on will be resentment at the public sector if it doesn’t share the severe upcoming pain. Council rate rises anyone?

Same for financial services such as banks, what's with the "mortgage holiday" no sharing the load in that, interest still accrues and is payable later including the compounding interest on it. I would like to see all steps in the chain sharing the load, banks reduced or no interest charged while incomes are reduced, landlords also only a portion of rent payable in the same period. It would very much annoy me that the wage subsidy was not passed on by the employer or when it was that it was to pass directly to banks and landlords in interest or rent.

Yep - Winnie has made so you can train a racehorses, but can't drive a port crane to load exports to pay for his baubles. I guess his baubles have to come to him by a more direct route than the export supply chain.

"At the moment, the cost-benefit ratio of the lockdown is somewhat out of whack. "
The "benefit" is that we're avoiding (or trying to) an Italy type situation or worse. So no, the cost-benefit ratio is not out of whack.

NZ case total rising for v simple reason: more testing.
Yet our star turn Head of Health, still saying lots of "capacity" for testing and clinical discretion and NOT testing anyone without symptoms.
DESPITE loads of people outside of non-questioning media of NZ, stating for some time that half of infections are by people who are , precisely, these non-symptomatic folk.
Brilliant.
S Korea did so well on restricting virus because they tested shit loads of non symptomatic people.
No one is copying them.
Australia and Uk are a joke but no one will be laughing.
Trump is a moron and hope he gets it

Incredibly we had a PM stating that you could not pass on the virus if you did not have symptoms.
"February 3rd, the ship was held in quarantine, during which testing was performed in order to measure COVID-19 infections among the 3,711 passengers and crew members onboard. Passengers were initially to be held in quarantine for 14 days. However, those that had intense exposure to the confirmed case-patient, such as sharing a cabin, were held in quarantine beyond the initial 14-day window [3]. By 20th February, there were 634 confirmed cases onboard (17%), with 328 of these asymptomatic (asymptomatic cases were either self-assessed or tested positive before symptom onset)."
https://www.medrxiv.org/content/10.1101/2020.03.05.20031773v2.full.pdf

Yes I think her advice was flawed there or she got her mucks faddled. Early reports always indicated that it couldn't be tested for unless you were symptomatic, but that it was infectious from the get go. Makes up to 14 days of spread before it could be suspected.

There's a bloods test now available (at least from this manufacturer, and in the USA) that reacts to the specific antibodies. Could be the key to the widespread testing that is absolutely needed to establish

  • actual infection rate
  • therefore death, hospitalisation and severity rates

.
Let's hope our Wise Ones have asked for a quote on (say) 10 million of these, and a delivery date.

Until the testing is widespread, characteristic of entire populations, NZ-wide and repeated, it's basically all feelz, FUD and blather.

But, but, that's how we do things, on our feelings- it's part of our 'Well beings'

Never let the facts get in the way of a good feeling.

Give people money when they are scared and they DO NOT spend it. they save it.

According to the Govt risk assessment to be at Alert level 4 there is:

Sustained and intensive transmission and,
Widespread outbreaks

So the Govt. are admitting this is out of control.

One person with underlying health issues is in icu, out of 378 cases. I don’t like Trump, but as he says, will the cure be worse than the disease?

Hope you are right.
However
NZ still in the covid beginnings, we need be careful in comparisons.
Think of icu cases now are from 2, 3 or 4 weeks ago. Remember how many cases there were then.
Spare a thought for the ICU medic teams.

The NPIs taken now will alter the patient numbers.
If there was better data, the backend mgt could be better run, run better.

See China has locked borders.

Go ask the Spanish that question. Btw, Spain has almost twice as many ICU beds per capita as NZ.

Pietro - you are missing my point. Maybe I didn't explain it well enough.

The Govt. has a definition of what the situation has to be for us to be in Alert level 4 ie sustained and intensive transmission and widespread outbreaks.

We either have that, or we are in the wrong alert level, or the alert levels do not mean what they say.

New York: New Jobless Claims go up 3.2 million meaning businesses are either ruthlessly culling or in trouble. Yet Dow Jones goes up. Rose up +300 pts last 10 minutes

Yeah, and about 14K new cases in USA overnight too. Pretty crazy. If they start getting a large number of fatalities then I expect their markets to fall significantly.

This is potentially worse than the nuclear armageddon threat that we experienced growing up inthe 60s and 70s and there have to be consequences for China..........these so called wet markets which we hear are re-opening in China, most be closed permanently .

If they don't close them they should be sanctioned

Yeah big pressure on them essential

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