Gareth Vaughan on Dr Doom's coronavirus conference calls, bailing out the bailout, the Epidemic Response Committee gets down to business, Andorra's police go above and beyond, plus Africa & COVID-19

Gareth Vaughan on Dr Doom's coronavirus conference calls, bailing out the bailout, the Epidemic Response Committee gets down to business, Andorra's police go above and beyond, plus Africa & COVID-19

Welcome to our latest COVID-19 lockdown Top 5 special. All our previous Top 5s are here.

1) Dr Doom's live conference calls on the coronavirus crisis.

Nouriel Roubini, Professor of Economics at New York University’s Stern School of Business, is doing live conference calls on the COVID-19 pandemic. Roubini's predictions have earned him the nickname "Dr Doom". He predicted the US housing market crash of 2007-2008, and more recently dismissed blockchain as "the most overhyped – and least useful – technology in human history."

Tune in and grab some popcorn because Roubini won't be dull and nor will he beat around the bush. "This is not a Fool's Day joke," he says in a promotional video.

2) Bailing out the bailout.

Rolling Stone's Matt Taibbi argues the US Government's US$2 trillion COVID-19 response is "a double-down on the last disaster." By this he means the 2008 Global Financial Crisis bailouts "when the taxpayer was asked to bail out the very people who’d caused the crisis."

The new bailout bill, which combined with a series of Federal Reserve interventions is more like a $6 trillion rescue, is a massive double-down on the 2008 rescue efforts. This bailout of the last bailout sets the stage for permanent state sponsorship of America’s overheated financial markets.

Taibbi is not impressed.

As happened in the run-up to September 2008, Wall Street in recent weeks warned of Armageddon if the Fed did not immediately start spending billions per minute to buy every conceivable kind of financial product.

The Fed responded by dusting off emergency lending facilities like the Term Asset-Backed Securities Loan Facility (TALF), the Commercial Paper Funding Facility (CPFF), the Money Market Mutual Fund Liquidity Facility (MMLF), the Primary Dealer Credit Facility (PDCF), the Secondary Market Corporate Credit Facility (SMCCF), the Primary Market Corporate Credit Facility (PMCCF), all of which saw action after the crash of 2008. Each would be used to step in and buy financial products in the various markets frozen due to virus panic.

The Fed furthermore announced that on March 23 it would begin buying $50 billion in government-backed mortgage securities, in addition to $75 billion in treasury bills, every day.

They’ve since lowered those numbers, but the scale of these interventions dwarfs any of the Fed’s actions post-2008. A $50 billion buying spree roughly represents as much Fed support of mortgage markets in one day as was done across a month at the peak of the last round of Quantitative Easing. Taken in conjunction with the CARES Act, the Fed and the Treasury were now positioned to become a major ongoing buyer of everything from mortgages to U.S. government debt to exchange traded funds (ETFs) to corporate bonds to money market funds.

The problem? A lot of these markets were already overinflated thanks to post-2008 bailouts and interventions like Quantitative Easing. We’re about to find out that the American economy has been living off dying, dysfunctional, or hyper-leveraged markets for over a decade. The Trump administration just bought this undead economy at retail prices and committed the Fed and the Treasury to sustaining it.

A major issue with the post-2008 bailout programs is that they tended to increase rather than decrease the risk in the system. A decade-plus of zero-to-low interest rates and massive central bank buying programs like QE made traditional safe havens unattractive and pushed investors to chase returns in a variety of not-so-healthy ways.

And he sees no end in sight.

As with 2008, the emergency support is supposed to be temporary, but there’s less belief that this is even ostensibly true this time around. There will be a lot of howling over the irony: Trump when he ran for president in 2016 said then-Fed chief Janet Yellen should be “ashamed” of creating a “false stock market” for Barack Obama. Our future will be a parody of the Yellen economy.

Short-term loans to make payroll and keep tenants in storefronts are only a part of the rescue. The coronavirus emergency is probably temporary. The bailout looks like forever.

3) Parliament's Epidemic Response Committee gets down to business.

The Epidemic Response Committee, a special parliamentary select committee created to consider the Government's response to the COVID-19 pandemic, held its first meeting on Tuesday. As I write the second meeting is underway and can be viewed here.

In the first meeting Otago University Professor David Skegg, an epidemiologist, shared some sobering views, as the NZ Herald reports.

Skegg said that the testing had been skewed to symptomatic people who have been overseas or were in close contact with a confirmed case, and was therefore a poor indication of community transmission.

Bloomfield has said that about 10 people, or 2 per cent of all cases, were due to community transmission, but Skegg said that was "very misleading".

"Every time the public are told only 2 per cent of the cases appear to involve community spread - it's meaningless.

"You only get tested if you come from overseas or if there are epidemiological reasons to suspect the person might be infected."

That strict criteria meant that there was probably a "far higher" number of actual cases than the 647 confirmed and probable cases to date, he said.

And;

Wider community surveillance testing needed to be done, he said.

"Have we got 500 undiagnosed cases out there or do we have several thousand? We don't know."

The Ministry of Health on Tuesday said over the last seven days the average daily test number was 1777. Prime Minister Jacinda Ardern said the Government had broadened guidelines around Covid-19 testing allowing for more people to be tested.

4) Coronavirus, a looming threat to Africa.

The International Consortium of Investigative Journalists t(ICIJ) takes a look at what impact COVID-19 might have in Africa, where most countries aren't well equipped to fight it. This is done through the lens of ICIJ partner journalists in Senegal, Sierra Leone and Zimbabwe.

Sierra Leone is still struggling to recover from the Ebola epidemic, which killed more than 3,500 people in 2014 and 2015. And Zimbabwe sounds especially badly prepared.

Zimbabwe is in worse shape, said Chitagu, a reporter with Newsday. “Our health system is in shambles,” he said. “The country’s first isolation center in [the capital] Harare, does not have a ventilator, oxygen, running water or even a working socket.”

Nurses don’t have protective clothing, Chitagu said. Hospitals don’t have drugs. “If there are a lot of people diagnosed with the disease, our hospitals will be overwhelmed,” he said.

5) Going above and beyond the call of duty.

Parents of young children will have heard the extremely irritating 'Baby Shark' children's song. And many of the rest of you have probably not been able to escape it, even if you've tried. Thus I am reasonably happy not to be stuck in Andorra during the COVID-19 pandemic...

 

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.

15 Comments

Now that's real police work.

time bureaucrats considered change, 34 studies showed 80 percent population wearing masks stopped virius spread, Sweden who are operating as normal- no lock down dont seem to be doing any worse that us and damage to people and economy of being locked down is too great

If you go by the numbers of infected and deceased (4,400 and 180), Sweden are doing much worse than us. Sweden has long given up caring for it's citizens though, not surprised they haven't taken any action in this crisis.

And if you are away back in the dinosaur days where people thought 'the economy' was important, time you did some homework.

It was pursuit of 'the economy' at exponentially-growing pace, that was emptying and trashing our only planet. And overpopulating it. By wrongly counting.

Hello PDK, do Humans = Economy?

Just wait a week or two - the events ( rapid spread of the virus .. ) will force a change in Swedish approach . We have seen it the UK , the Netherlands and elsewhere ; merely a matter of a short time.

https://www.worldometers.info/coronavirus/country/sweden/

Case count growth is low, resolved cases are 92% ending in death.
Compared with Australia, case count growth is much higher, but of resolved cases 95% recovered.

Makes me suspect that testing in Sweden is not widespread, and the cases are largely underreported. Although Sweden does have a higher percentage of older people.

#3: Yeah, we will need to be doing far more testing in a months time to transition to the South Korean model. Blanket measures (i.e. national lockdowns) are far too economically disruptive to be repeated but we need the testing resolution to be able to isolate pockets of infection. Also we do need to start randomised testing across the general population.

The number of tests run should be seen as a proxy of our progress in fighting the disease at this stage.

we need people to be able to leave their houses and the economy back at work- testing masks washing hand distancing cooking is the next step

Question for the experts on #2; "A major issue with the post-2008 bailout programs is that they tended to increase rather than decrease the risk in the system." this bailout bailed the banks. If the Government instead had bailed out the depositors instead, what would have been the outcome?

A lot of the 401K accounts would have been invested in stocks and shares so most of those will have tanked, but if the Government, instead of paying $trillions to the banks, had said they would refund those accounts at say 80% of their value, the week before the crisis hit, to the people who held them, not the banks, what would have happened?

On topic of numbers in Italy. But applies anywhere.
https://www.youtube.com/watch?v=bM9aZflBoOU

Regarding Skeeg comments:

“That strict criteria meant that there was probably a "far higher" number of actual cases than the 647 confirmed and probable cases to date, he said.”

Why aren’t our hospitals overrun like Italy then if he thinks community transmission cases are far higher here? If this virus alone is soooo deadly like the media are portraying... cough, splutter, ache, runny nose....nope, recovered well.

And further more (ranting and heavy breathing increasing) what is up with these probable cases? Why we are tirelessly committed as humans to fudge numbers and mislead it’s beyond me. What’s the probability that a probable case will be a confirmed case?

rbnz february data shows domestic credit up 7 billion to $493 billion, govt another $70 billion debt (some double accounting) and another $50 billion gifting promised, lots of money no production equals inflation. the poor will spend winter in tent city. NZ not a reserve currency we need a strong economy. heres abit from Dr Eds bog Taiwan’s Masks. Wearing masks to eliminate the virus pandemic seems to be working in Taiwan, which has a population of 23.8 million. Taiwan is right next to mainland China, and lots of businesspeople and tourists travel between the two countries. Indeed, hundreds of thousands of Taiwanese work and invest in China.

As of yesterday, Taiwan had just 306 cases of COVID-19 and five deaths! Consider the following points gleaned from a February 10 VOA article titled “Taiwanese Scramble for Face Masks to Stop Deadly Virus From Nearby China”:

(1) The island nation has a dense population where multiple generations live under the same roof. The Taiwanese are prone to influenza and a contagious gastrointestinal illness that has killed small children. They also recall the severe acute respiratory syndrome (SARS) epidemic of 2003. SARS originated in China and spread to Taiwan, killing 73 on the island.

(2) The disease-wary Taiwanese tend to wear surgical masks as a precaution against airborne pathogens at higher numbers than people elsewhere. In Taipei, a city of 2.6 million, 50% of people routinely wear face masks.

(3) The island’s 80 mask producers have raised production recently to meet rising demand amid the COVID-19 pandemic, despite a rationing of sales to ensure that no one hoards the supplies.

(4) Demand for surgical face masks—to prevent cough-borne COVID-19 droplets from landing on others—has surged throughout East Asia. That’s particularly true in Malaysia and Thailand, which get high numbers of Chinese tourists. Malaysia, with a population of 32.3 million, has had 2,626 cases of COVID-19 and 37 COVID-19-related deaths. Thailand has a population of 69.7 million, 1,524 cases, and 9 deaths.

We will survive this crisis. But let’s not lose our minds, our jobs, and our businesses without considering our options and the consequences of our actions.

becoming harder each day to think there is any truth or transparency in this government -- and that it is not simply a Jacinda for global president vehicle - or one way ticket to a socialist republic

listening to her saying test test test - we have known this for weeks -- but HER ministry has not being doing it -- as no real capacity -- and dont want to show the true scale of it - now she wants the lock down to go on longer - so its test test test to give me more evidence for continuing the state of emergency

1% community tansmission-- by some obscure definition-- og the 29 cases in matamata - only one was abroad the rest caught it from community transmission-- just because you can go a got it from b form c then d and over to e and f then g - and H who was abroad -- means thats all linked to overseas travel -

Closing the borders early and going hard -- Nope 50000+ coming in for several weeks before when it was obious the extent of the potential problem and it was only growing larger

PPE for health workers -- in your dreams --not a single NGO has had any PPE unless for a confirmed case -- Yesterday teh response from teh DHB to us - was only 1 week supply and only if you can show you have used those supplies on an existing case -- its Bullshit for our brave staff workign 8 hours a day in very trying conditions

fuel - dropped from $2.29 to $2.00 oil from $65 to $22 a barrel
Supermarkets -- prices up about 15% and all discounts dropped -- yesterday a $3.50 special on an item normally $1.99 and no means the worst

Stop the posturing - the presidential addresses , the super compassionate smile - and start actually delivering something -- this is peoples lives -- not kiwibuild

Would Africa have even noticed Covid but for the uproar in the west? The average age in Africa is 18 and only 3% of people are over 65. Europe however...

Your access to our unique content is free - always has been. But ad revenues are diving so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.