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A World of Emptiness - Near Financial Collapse

by Oui Tue Apr 14th, 2020 at 01:01:00 PM EST

COVID-19 Attack: A look at the empty New York City streets amid the coronavirus

    "The crisis has brought the economy to a near halt, and left millions of people out of work. But thanks to intervention on an unprecedented scale, a full-scale meltdown has been averted - for now."

How coronavirus almost brought down the global financial system | The Guardian |

n the third week of March, while most of our minds were fixed on surging coronavirus death rates and the apocalyptic scenes in hospital wards, global financial markets came as close to a collapse as they have since September 2008. The price of shares in the world's major corporations plunged. The value of the dollar surged against every currency in the world, squeezing debtors everywhere from Indonesia to Mexico. Trillion-dollar markets for government debt, the basic foundation of the financial system, lurched up and down in terror-stricken cycles.

More below the fold ...


On the terminal screens, interest rates danced. Traders hunched over improvised home workstations - known in the new slang of March 2020 as "Rona rigs" - screaming with frustration as sluggish home wifi systems dragged behind the movement of the markets. At the low point on 23 March, $26tn had been wiped off the value of global equity markets, inflicting huge losses both on the fortunate few who own shares, and on the collective pools of savings held by pension and insurance funds.

What the markets were reacting to was an unthinkable turn of events. After a fatal period of hesitation, governments around the world were ordering comprehensive lockdowns to contain a lethal pandemic. Built for growth, the global economic machine was being brought to a screeching halt. In 2020, for the first time since the second world war, production around the world will contract. It is not only Europe and the US that have been shut down, but once-booming emerging market economies in Asia. Commodity exporters from Latin America and sub-Saharan Africa face collapsing markets.

It is now clear that we can, if circumstances demand, turn the economy off. But the consequences are catastrophic. Across the world, hundreds of millions of people have been thrown out of work. From the street hawkers of Delhi to the personal trainers of LA, the service sector - by far the most important employer in the modern economy - has been poleaxed. Never before has the global economy suffered a shock of this scale all at once. In the US alone, at least 17 million people have lost their jobs in the last three weeks. A severe global recession is now inevitable.

[...]

The financial markets scan the world for risk. Even the slightest disruption in the vast networks of finance, production and trade offers the opportunity for profit or the threat of loss. So the news on 23 January, that the outbreak of an unknown virus was serious enough for the Chinese authorities to impose a gigantic quarantine, hit the traders on their Bloomberg terminals hard. Bank economists struggled to get a grip on the dimensions of the problem. Would this be a minor disruption like Sars in 2003? Or were we facing the nightmare scenario of the Hollywood film Contagion?

In late January, investors began to move more and more money out of things like commodities and shares in companies, and into the relative safety of government bonds. What comforted them was the idea that the virus was a problem contained in China. The day that illusion burst ...

[A long read, worthwhile ...]

Parts of Globalization will end - the New Normal

COVID-19: Briefing note, April 13, 2020 | McKinsey |

Our latest perspectives on the coronavirus pandemic.

In this note, we offer some of our latest insights on the COVID-19 pandemic, starting with a survey of the current epidemiology and the five dynamics leaders need to watch: the efficacy of the surge in critical care, the expansion of testing and other traditional approaches, the development of antibody testing, the unknown nature of immunity, and a wave of innovation that might produce treatments and vaccines.

We then highlight four of our many recently published articles, each designed to help senior executives lead through the crisis. In "How to restart national economies during the coronavirus crisis," we offer a new framework to help business, economic, and public-health leaders around the world know when it would be safe to reopen portions of their domestic economies. "Europe needs to prepare now to get back to work--safely" provides Europe-specific insights on the same critical topic. Many Asian economies have already reopened in part. Drilling down even further, in "Winning the (local) COVID-19 war," our colleagues explain how local leaders can take up the fight. And in "Could the next normal emerge from Asia?," we consider the new behavior and ways of working, now being tested in Asia, that might soon become global standards.

How Singapore And South Korea Deal With Coronavirus Quarantine Measures | Forbes |

We do know Trump's team working the buttons of U.S. Government policy ... and it wasn't the CDC Redfield or fallen star Dr. Fauci ...

"You Know You Are Fake!!"

IT WILL NOT END

More to follow ...

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by generic on Tue Apr 14th, 2020 at 04:20:36 PM EST
Needs moar krugman observations, possibly weed.
by Cat on Tue Apr 14th, 2020 at 05:04:08 PM EST
[ Parent ]
by generic on Tue Apr 14th, 2020 at 08:03:04 PM EST
[ Parent ]
by Cat on Wed Apr 15th, 2020 at 02:30:01 PM EST
[ Parent ]
The British Empire under leader Boris Johnson faces worst Depression in 300 years.

Work, Employment and Society | Sage Journal |

The Inverting Pyramid -- Pension Systems Facing Demographic Challenges in Europe and Central Asia

Global Warming - distance between America and Europe is steadily increasing.

by Oui on Tue Apr 14th, 2020 at 09:07:04 PM EST


Global Warming - distance between America and Europe is steadily increasing.
by Oui on Tue Apr 14th, 2020 at 10:18:18 PM EST
The 1929 depression was spread over three years, and was larger. But we are only a few months into this one, so perhaps it is early to make a direct comparison?

Also, if debt reduction is the goal, that is great, but many countries were already going in the other direction during the previous robust economy. Why would they suddenly decide to reverse course?

Another point is that in 1929, the idea of massive government interference in the economy was not yet a popular idea; now even the most right wing economists support it.

by asdf on Wed Apr 15th, 2020 at 04:23:41 PM EST
[ Parent ]
Why would they suddenly decide to reverse course?

Because if you want to keep your private high-stakes gambling-with-Junior's-college-fund club in the casino penthouse suite, giving penny chips to the hungry crowds baying in rage down in the parking area is not going to help much.

government interference in the economy

Hadn't Keynesianism hadn't got enough people around to calling it 'public investment' instead of 'interference' by then?
Or possibly simply 'administration of basic common sense rules to the money game'?

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Apr 18th, 2020 at 06:01:58 AM EST
[ Parent ]

Virus lays bare the frailty of the social contract - Opinion The FT View

Radical reforms -- reversing the prevailing policy direction of the last four decades -- will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.
by Bernard on Wed Apr 15th, 2020 at 06:58:16 PM EST


Global Warming - distance between America and Europe is steadily increasing.
by Oui on Sat Apr 18th, 2020 at 11:48:49 AM EST


Global Warming - distance between America and Europe is steadily increasing.
by Oui on Mon Apr 20th, 2020 at 07:43:53 PM EST


Global Warming - distance between America and Europe is steadily increasing.
by Oui on Tue Apr 21st, 2020 at 08:06:59 AM EST


Global Warming - distance between America and Europe is steadily increasing.
by Oui on Mon May 11th, 2020 at 10:01:38 PM EST


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