By Denny Gulino
THE WHITE HOUSE (MaceNews) – Facing weeks, months, a year or more of worsening virus news until a vaccine is ready, U.S officials told their White House audience of reporters Wednesday that, “Sadly, we received word today another American passed away.”
Actually there were two more fatalities, California’s first and Washington State’s tenth.
The daily virus briefing also included some news that some of the millennial generation should find comforting, that in South Korea none of the fatalities have been younger than 30 years old.
The cruise ship that had been on the way to Hawaii by way of Mexico has turned around to return to San Francisco. The Grand Princess is Carnival’s sister ship to the Diamond Princess where a vacation trip turned into quarantine hell in Japan in January as the virus raged. Most of those passengers repatriated to the U.S. are recovering. What has happened and will happen to the more than 3,000 aboard the Grand Princess is yet to be determined.
The stock markets soared, though, as investors shut out the probability of economic setbacks that seem inevitable to concentrate on reclaiming more of what has been lost in the past week and a half, buying shares as if the sale prices would go away any time soon and savoring the intensifying challenge to Wall Street’s nemesis, Democratic Socialist Bernie Sanders.
And mortgage interest rates keep falling along with U.S Treasury security yields, prompting a huge influx of buyers and a lot of hiring by mortgage banking firms. FHA rates are reported to be already under 3% in some cases.
President Trump seemed preoccupied with “Mini Mike” Bloomberg and “Pocohantas” Warren, with four biting tweets among several related to Super Tuesday results, a day that reinflated the threat of a Joe Biden juggernaut though Sanders, the candidate Trump prefers, kept building his state delegate lead as California counted more votes. Biden won 10 of 14 states and the backing of Bloomberg’s deep, deep pockets.
Since he joined the campaign dropouts, Bloomberg’s team says it will take several days to repurpose their massive campaign infrastructure to reinforce the Biden effort.
During a meeting with airline executives, Trump took aim at another of his favorite targets. “The Obama administration made a decision on testing that turned out to be very detrimental to what we’re doing, and we undid that decision a few days ago so that the testing can take place at a much more accurate and rapid fashion,” he said.
During his briefing, Pence tried again to pinpoint exactly what is happening with corona virus testing kits. About 2,500 will be on their way soon, enough, he said, to test more than a million people. The Trump administration has loosened some rules so that every publicly funded laboratory can process the tests.
Pence said commercial labs will be next though, “We’re not there yet.” His briefing ended as reporters shouted the question of how the uninsured will afford to get tested, a question that remains unanswered.
At the International Monetary Fund and the World Bank it was disclosed that hundreds of billions of dollars more than a trillion are being mobilized to build the quarantine facilities, provide working capital for small firms, supply the medical hardware and literally buttress the world for a year in which the global economy shrinks. At the beginning of this year the IMF was forecasting 3.3% growth. No more. Countries that have no health system defenses against the virus are top priority but already a third of the world is seeing the virus spread.
IMF Managing Director Kristalina Georgieva told reporters China says it has restored 60% of its industrial production and will get to 90% soon. Those figures are being met with skepticism in some circles. Unfortunately, she added, the previous base case that saw China successfully containing the virus had to be abandoned.
“The disease is spreading quickly with over one third of our membership affected directly,” she said. ”It is a global problem coming for a global response.”
Past experience shows that eventually a vaccine will be available, she said, and the challenge now is to build a “bridge” to that point.
“About one third of the economic losses from the disease will be direct costs from loss of life and workplace closures,” she said, with the indirect costs reflecting “consumer and business behavior and in tightening of the financial markets.”
The IMF held a conference call Wednesday morning to capital cities worldwide of the type that will replace the IMF-World Bank spring meeting in April that otherwise would have drawn hundreds of finance ministers, central bankers and their staff to Washington. It worked fine, she said, and will really reduce the Fund’s carbon footprint – while crushing Washington D.C.’s April hotel revenue and cut deeper into airline earnings.
As if to underscore her dire outlook, Italy said for the time being sports events will be held without any fans in the stands, a severe hit to sports revenue that could be forced on some other countries soon.
She urged central banks to do more rather than less to help out, as the Federal Reserve and the Bank of Canada have already done with their half-point rate cuts in the past two days.
As Mace News’ Steve Beckner reported earlier in the day, St. Louis Federal Reserve Bank President James Bullard cautioned markets not to assume that the Fed’s policymaking Federal Open Market Committee will cut interest rates again at its March 17-18 meeting. Those who trade fed funds futures did not seem to be listening, with the CME FedWatch tally showing 100% probability of another Fed rate cut at the next meeting.
The Fed’s Beige Book survey of economic conditions throughout the country, published Wednesday, showed the corona virus nibbling at the edges, likely a concern for the Fed’s business contacts that will have grown some more by the time FOMC members look at the latest data.
After nightfall Wednesday, Asia stock markets opened on the plus side, carrying through the U.S. surge that lifted the Dow industrials 1173 points, or 4.5%.
Big numbers also posted during the day on the floor of the House of Representatives. The $8.3 billion anti-virus package passed 415-2 and now goes to the Senate for passage on an expedited basis.
Can central bank rate cuts, many hundreds of billions spent by governments and the multilateral banks, massive quarantines, fanless stadiums, canceled travel and tourism and so much more slow down the virus spread without a vaccine, still a year to a year and a half away?
Again, from one of those watching what’s happening around the globe, IMF chief Georgieva: Our biggest challenge right now is handling uncertainty.”
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Contact this reporter: denny@macenews.com