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    How Will The Coronavirus Impact The Markets?

    It's a true Black Swan event that stocks haven't yet priced in
    by Chris Martenson

    Tuesday, January 28, 2020, 11:10 AM

The 2019-nCoV “coronavirus” outbreak remains serious and fluid.

Over the past several days, we’ve been publishing a steady stream of videos, reports and podcasts to keep you as up-to-date and informed as possible on the science behind this fast-developing situation. You can follow our full coverage of the coronavirus here.

But the TL;DR version is this:

The first order of business is stopping the spread of the disease, which means prevention.  Your immediate and top concern should be readying yourself and your household and loved ones for the arrival of 2019-nCoV. We cover the most useful practices in this report.

Second, help your co-workers and students, passengers, or other such dependents become aware and prepared by practicing good hygiene and educating them about how the virus spreads.

IMPORTANT:  Anyone who is sick, whether with nCoV or a standard flu/cold, needs to be isolated for the duration of the disease, which means 24 hours after their last fever. They should always, always, always wear a surgical mask to block virus particles before they are expelled into the air.   Masks can be worn by everyone, but do the most good when worn by those who are ill.

But in addition to presenting a major public health risk, the coronavirus is already doing serious economic damage. China, the world’s second-largest economy, is essentially “closed for business” right now.

The disruption to global trade the coronavirus is likely to cause is going to be material, perhaps severe. And that will have serious negative consequences for the financial markets, which have been (and is still!) trading at the highest valuations in history.

The coronavirus has all the hallmarks of a true Black Swan event.

Markets & Global Economy Already Impacted

Note:  This is an extremely fast-moving situation and the data is coming in so quickly that it has to be presented as a mosaic.  I’ll do my best to make sense of it for you, but I really want you to allow yourself to trust your own assessment of what pattern the dots make. Much of this data has just been gathered this morning (1/28/20).

Remember: it’s not the fall that harms you, it’s how fast you stop.

For years now, the global economy has been debt-strangled and limping along, kept alive by constant central bank interventions and money printing. Like any weakened victim, the last thing it needs is any kind of serious shock.

The coronavirus has all the features of the proverbial Black Swan event we’ve long been worried about.  Nobody saw it coming, it hit hard and fast, and is spreading far faster than government bureaucracies and the markets can adjust.

It’s the equivalent of slipping an iron bar into the front spokes of a moving bicycle.

We can’t possibly predict how all the implications of this will manifest. Our globalized economy is just too complex.  We have a world-wide, just-in-time manufacturing and delivery system.  Which just got a huge stick shoved between its spokes.

What does it mean to completely shut down the normal business activities of cities with 5, 10 and even 25 million inhabitants?  Particularly in a country with massive property bubbles, where the median price-to-income ratio can be as sky-high as 40(!!)?

Shanghai has a population of 24 million and Suzhou another 10.7 million.  Both are now all but completely shut down.

Shanghai is China’s equivalent of New York City.  It hosts the main stock exchange and is where the Shanghai Gold Exchange (SGE) is located.  Suzhou is a vital manufacturing hub.

I can’t express just how crazy it is to see the videos and pictures from these towns showing empty 8-lane roads, which are normally crammed 24/7 with cars and trucks.  Empty subway cars.  Nearly abandoned railway stations.  Empty sidewalks.

Like literal ghost towns. ‘Ghost cities’ in this case.

Shanghai

(Source)

No cars, no trucks, no people, no commerce.

If that isn’t a stick in the spokes, I don’t know what is.  There’s just no way to plan for such an event. You just have to brace for the impact.

Once people self-isolate (which is exactly what they should be doing, and what I will do myself should the virus makes it to my town), economic activity just… stops.

And this is being woefully underappreciated by the global equity markets right now.

Of course, I’ve long ranted that we now have bastardized ““markets””, deformed by the terribly misguided and ultimately destructive actions of the world’s central banks and their misguided money printing.

Well, good luck trying to print your way past a virus. Or of a nation’s bus drivers and factory workers staying home.

Below is a graphic showing the location of Apple’s Foxconn plants relative to the coronavirus outbreak:

And yet Apple stock is still trading within a whisker of its all-time high, up nearly 3% as I’m typing this.

See any disconnect?

Beijing

 

I can’t really wrap my head around this cavernous train station being all but completely deserted.  Anyone who’s been to Beijing knows that this place is usually furiously humming with commuters like a beehive. The contrast is really stunning.

Wuhan

The above is a usually completely crammed intersection. All we see now is a single parked car.

(Source)

A few people just strolling across the equivalent of 5th Ave NY in the middle of the day without even bothering to look either way. There’s no one about.

Global Travel

Whether for business or pleasure, global travel is being impacted.  Tourism is taking a huge hit.  Again, there are almost too many data points to process.  But here are a few:

Too Much To Process

I have too many other such data points to present.  I don’t want to overload you or make this article encyclopedic.  But hopefully I’ve provided enough examples above to give you a sense of the near-instantaneous halt the coronavirus has placed on China’s domestic economy and travel.

The data on its impact on manufacturing and trade won’t be known for a little longer, but it’s safe to guess it will be ‘significant.’

This is the nature of fast-moving situations.  You have to rapidly grasp a lot of fragmentary data and turn it into something actionable.

And I’ll give you my sense: This is already a massive shock to the Chinese economy.  Which in this hyper-connected world, will quickly translate into a shock to the entire global economy. 

That hasn’t fully registered yet for most people, and therefore, the markets. But that’s coming.  Soon.

The US Is Especially Vulnerable

In the US, healthcare costs are the #1 economic threat to households.  More families go bankrupt due to our predatory and inhumane medical care system that any other cause.

Because people can’t afford to call an ambulance or dare to go to the emergency room for fear of being financially destroyed, they will resist seeking treatment until the very last minute.  This means detecting people infected with the coronavirus will be slower than in many other countries. Which means the illness will be able to spread farther and faster as the unhospitalized sick and untreated infect more people.

“If The Dow Is Up, Everything’s OK. Right?”

Financial price bubbles require two things to sustain themselves: ample credit and a compelling story.

Ample credit has been supplied by increasingly desperate central banks willing to do “whatever it takes” to keep stock and bond prices elevated.

A normal market confronted with all the above evidence and uncertainty would be experiencing a sell-off here. Markets are supposed to based on future earnings. Less economic activity = less future earnings. Some sort of downwards repricing would be prudent, healthy and mathematically sound at this point.

But what are they doing?

Being bought furiously in the overnight ““markets””.  Here’s a  chart from this morning (Tuesday 1/28/20):

This is how silly and stupid things have become.  The Fed and the Plunge Protection team (PPT) are now on a daily mission to keep stocks from selling off.

This is wrong, perhaps even evil. As it keeps people from appreciating the gravity of the situation. Falling markets would signal that maybe, possibly, something is wrong. That investors should start adopting more caution.

Which they should at this time. Current stock prices simply can’t be justified given what the coronavirus is doing to the world economy. No way, no how.

What Happens If….?

As I said, bubbles need two things: ample credit and a good story.  The main “story” of the markets over the past few years has become almost entirely this; “The Fed won’t let them fall.”

There’s been a lot of truth to that sentiment.  It’s not wrong.  Or at least it hasn’t been.

But can Fed printing and market-propping make China’s empty mega-highways and grounded flights start burning more oil?  No, it can’t.  So, oil prices will fall. And US oil companies will suffer.

Can Fed printing and market-propping compel the Chinese workers to return to their factories? No.

Can Fed printing and market-propping make tourists return when no one wants to be around crowds?  Again, no.

These and a dozen other such questions all end in “no.”

Which is why the story that has been driving the stock market bubble suddenly is breaking.

So, what will happen when the Fed is revealed to be impotent?

Well, then that’s the end.  No narrative = no bubble.

And at today’s record highs?

A painful market correction, perhaps even a full-blown crash (stocks down 30-50%), will be the inevitable result.

Conclusion

Today markets are still clinging to the idea that the Fed “has got this.”  The sell-off on Monday (just -1.5% on the S%P 500) was entirely too minor to count as anything at all. The vigorous futures buying the next morning says the same thing.

The market doesn’t yet believe that the coronavirus risk is real.

Which means that this may be one of those very rare moments in market history where the immediate future is briefly visible to us, just a little bit before everyone else.

Once you’ve taken the necessary steps to protect your family’s health against the coronavirus threat, then do the same for your money.

Minimize risk. Reduce your exposure to a market crash. And, for those with the risk tolerance, possibly position yourself to profit from one. (Full disclosure I am net short the US equity markets at present)

There are many ways to reduce risk in your portfolio. In this report for our premium readers, Positioning For A Downturn we detail out the wide range of options that investors have for both protecting against a downturn and, for the more courageous, profiting from one.

Again, we are in a rare and likely very brief moment where we see the risks from the coronavirus that the market does not. Use this time wisely.

Click here to read the report (free executive summary, enrollment required for full access).

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34 Comments

  • Tue, Jan 28, 2020 - 11:52am

    #1

    George Karpouzis

    Status: Silver Member

    Joined: Feb 17 2009

    Posts: 177

    4+

    N95 masks are gone

    I went to 3 stores today all completely sold out. Online is not even worth checking anymore. Unfortunately, none of my immediate family is even remotely prepared for what could be here. I myself thanks to this site acted accordingly and picked up several cases in advance.

     

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  • Tue, Jan 28, 2020 - 12:11pm

    #2
    Mots

    Mots

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    9+

    for new members of the site: consider buying a subscription

    If you are new to the site and have “a portfolio” then you probably have not seen CM’s comments on how to prosper financially before now.  Paying for a subscription should be very valuable and more importantly will allow you access to tons of pre-existing special reports, that you can download during your subscription period.

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  • Tue, Jan 28, 2020 - 12:13pm

    Reply to #1
    MasterOfMyDomain

    MasterOfMyDomain

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    Joined: Apr 20 2011

    Posts: 17

    3+

    Found masks at Lowes after told they didn't have any

    Went to Lowes this afternoon for N95 masks (preferably with valves). I was told they’re all gone and, sure enough, where they normally put them in paint was indeed cleared out. However, I wandered all over the store and found small quantities of them in mini-displays all over the place. Was able to find 19 two-packs of N95 with valves. That’s all I had was masks on the checkout counter. I could tell the two people behind me were staring at this big pile of masks. The cashier said “Wow, that’s a lot of masks.”

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  • Tue, Jan 28, 2020 - 12:19pm

    #3
    Andy_S

    Andy_S

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    Joined: Jan 27 2020

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    SAW YOUR NEW VIDEO on the ECONOMIC IMPACT

    And I agree. Huge disruption coming – and massive hit financially to China. All this on top of the tragic human cost.

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  • Tue, Jan 28, 2020 - 12:42pm

    Reply to #1
    Helix

    Helix

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    Interesting.  I went to Lowe’s, my local hardware store,and my local building supply yesterday and they all had N95 masks in stock.  I live in a rural area, so maybe that was a factor.

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  • Tue, Jan 28, 2020 - 12:43pm

    Reply to #1

    George Karpouzis

    Status: Silver Member

    Joined: Feb 17 2009

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    Rural areas

    Makes perfect sense

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  • Tue, Jan 28, 2020 - 12:48pm

    #4
    john316jr

    john316jr

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    Joined: Jan 28 2020

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    Received a student flying in from Wuhan in Northern California on the 16th of January

    I am now fighting a bug (trouble with breathing, flu symptoms).  The student and I were both responsible and tried to inform the Public Health in our area and were told not to worry because ‘there were no reported cases of Corona Virus in our area’.  The student lives in a dorm with others and shares a common bathroom and dining area.  So much for concern.  The student is at least being isolated in his room for a couple days by the school but how about that Department Of Public Health?

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  • Tue, Jan 28, 2020 - 12:57pm

    Reply to #4

    herewego

    Status: Bronze Member

    Joined: Aug 11 2010

    Posts: 136

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    Please keep us posted

    Hello John 316jr

    I wanted to appreciate you for sharing this, and wish you both (and all nearby) the best through the next weeks.  It must be disconcerting to not have a diagnosis, or be taken seriously by those who should be on red alert.

    Would you keep us updated?

    Thanks

    Susan

     

     

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  • Tue, Jan 28, 2020 - 12:59pm

    Reply to #2

    Adam Taggart

    Status: Platinum Member

    Joined: May 25 2009

    Posts: 2923

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    Free Portfolio Crash Audit

    Mots wrote: Paying for a subscription should be very valuable and more importantly will allow you access to tons of pre-existing special reports, that you can download during your subscription period.

    Thanks for giving folks this advice, Mots.

    Also, the many new readers here this week may be unaware of Peak Prosperity’s endorsed financial advisor. If you are concerned about the markets and unsure how to position your investment portfolio against a market downturn, you can schedule a completely free, no-commitment personal portfolio review with our advisors by clicking here.

     

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  • Tue, Jan 28, 2020 - 1:06pm

    Reply to #4

    Adam Taggart

    Status: Platinum Member

    Joined: May 25 2009

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    Get Well

    John316jr —

    You have my sympathies, as well, I’m guessing, of everyone here on this site. Please take your condition seriously.

    Do you have a loved one who can serve as your advocate with the medical establishment? Someone who can see you get the care you need while making sure everyone in the mix knows about your potential exposure to the coronavirus?

    I assume you’re already self-isolating. Hopefully you have a cautious caretaker to monitor your condition and get you what you need as you get lots of rest.

    When awake, feel free to keep this community updated whenever boredom strikes. We’re here for you!

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  • Tue, Jan 28, 2020 - 1:27pm

    #5
    Sparky1

    Sparky1

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    $GPS video: Corona Virus Black Swan?

    Interesting video from reliable resource: https://youtu.be/UonaPDcAMuQ

    IMO, David Quintieri of the MoneyGPS ($GPS) researches his topics well and provides insightful, informed analysis. He’s being a bit cautious with this topic given his experience with YouTube censorship.

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  • Tue, Jan 28, 2020 - 1:35pm

    Reply to #4
    nigel

    nigel

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    John Remember the math

    Having a cold can be stressful, but just remember the math, you have a 97% chance of being just fine, that’s way better odds than you get in vegas. And as Adam said, feel free to share whenever you want, happy to chat about it with you.

    Drink fluids, it’s not just an aphorism, you need to drink lots of water, or tea, or soup. Take some vitamins, and drink some more fluids.

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  • Tue, Jan 28, 2020 - 1:54pm

    #6
    RebelYell

    RebelYell

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    John - you need to make more of a fuss

    John,

    I think you need to contact your doctor (again?) and explain the situation (i.e. you have been in contact with a Chinese student from Wuhan who is now sick) to him or her.  I suspect they should test you, but at a minimum don’t let them off the phone until they have agreed to contact the local and/or state health department rather than you doing it directly.

    I also think you should make a list of everyone you have been in contact with and notify them.

    You could also call the CDC directly at 800-232-4636.

    David

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  • Tue, Jan 28, 2020 - 2:18pm

    Reply to #6
    ao

    ao

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    I wouldn't recommend calling the CDC

    Trying to get through any government agency’s 1-800 number is incredibly frustrating and will only serve to depress his immune system.  BTDT.

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  • Tue, Jan 28, 2020 - 2:34pm

    Reply to #2
    Thetallestmanonearth

    Thetallestmanonearth

    Status: Bronze Member

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    New Harbor

    I recently moved everything over to these guys.  PP has informed much of my decision making over the last decade and I’m glad to have my money with your endorsed adviser.  So far they have been great to work with and they are highly aligned with my view of the world.  I have funds in transit now to fund the account.  Hope they can get it invested before the worm turns.

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  • Tue, Jan 28, 2020 - 2:46pm

    #7

    Montana Native

    Status: Member

    Joined: Mar 17 2009

    Posts: 107

    6+

    First off, Thanks

    Great job covering this story in real time to both Chris and Adam here. Thanks to having been around for more than a decade, I already had most of my bases covered. I was wondering what kind of input there was on the N-95 masks. It certainly seems that it does a better job preventing the spread from a carrier vs preventing the infection. I bought 15 masks and have 10 more on their way for three people. Are these use once and toss? Is there a magic number of masks one needs? Just curious. I also own some 3m respirators with hard P-100 filters that can be disinfected. Only have 1 pair of safety goggles and one pair of safety glasses. Bought some more nitrile gloves I regularly use mainly because I think they might disappear from store shelves. If things got bad, my wife is the only one that would possibly have to show up at her pharmacy job. With a half mask respirator and 3m goggles she’ll be all breaking bad. At any rate, congrats on getting the attention I’ve felt you have always deserved Chris. Also nice to see some long time members crawling out of the woodwork to post during a time when Chris’ particular expertise can shine. Good luck out there kids!

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  • Tue, Jan 28, 2020 - 3:03pm

    Reply to #6
    RebelYell

    RebelYell

    Status: Member

    Joined: Dec 21 2019

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    It's not just John I'm worrried about

    The key to preventing an epidemic in US is following up with all the contacts of infected people fast – before the chain reaction starts and gets out of control.  So John needs to get through to someone who will take him seriously and take the appropriate action.  If that means spending a while on the phone then I think he should do that.

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  • Tue, Jan 28, 2020 - 4:52pm

    #8
    ezlxq1949

    ezlxq1949

    Status: Bronze Member

    Joined: Apr 29 2009

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    Wilful blindness?

    John316jr wrote:

    The student and I were both responsible and tried to inform the Public Health in our area and were told not to worry because ‘there were no reported cases of Corona Virus in our area’.

    Unbelievable. Could this be because (a) they don’t want the responsibility of looking after patients, or (b) they don’t want the expense ditto, or (c) they just don’t believe that it’s all that bad?

    Apparently NSW Health has told all citizens and international visitors that if they think they’ve contracted the virus to report to a hospital, and they will not be asked to pay for treatment. Fine, but if the numbers grow greatly, then what?

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  • Tue, Jan 28, 2020 - 5:19pm

    #9
    gyurash

    gyurash

    Status: Member

    Joined: Sep 07 2016

    Posts: 32

    2+

    Recovery rate

    Shutting down mega cities anywhere on the globe is going to have major repercussions these days.
    Some things I have not seen discussed yet are the apparent low recovery rates and the acknowledgment that health workers and doctors are getting ill. We may assume that health workers are taking all prudent precautions, yet some still get ill. I suspect this means a lower thresh hold for exposure than admitted to yet. I don’t think we have seen real numbers on the contagiousness of this virus. Avoidance is the only real precaution if you have to wear a space suit and get a chlorine shower before you take it off. why else would they shut down cities?

    Something nudging me is the admission that less than 100 people have been released as healthy and not contagious, out of how many thousands? Does everyone that gets this need ICU care in order to survive. Have there been any updates from patients that have pulled through to the recovery side?

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  • Tue, Jan 28, 2020 - 5:32pm

    Reply to #8
    nigel

    nigel

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    Hey ezlxq1949 regarding Australia

    The patient in Melbourne arrived on the 19th of January. Three patients that arrived in Sydney arrived around the same time, however one patient in Sydney arrived on the 6th of January, regarding this person:

    1) They had a very long incubation period at which point they have had 18 days to spread it

    2) Someone else who didn’t have it bad enough to present to a doctor in Australia gave it to them.

    If we assume a start date of the 6th of January, and a 7 day incubation period and an r0 of 2.4 then we have 14 people with the virus but only 5 confirmed cases, this suggests we have about 9 people wandering around transmitting the virus, and over the next week that should increase. Without isolation and containment the virus is functionally uncontrolled in Australia, just as john has illustrated it’s functionally uncontrolled in the US.

     

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  • Tue, Jan 28, 2020 - 6:35pm

    #10

    dcm

    Status: Bronze Member

    Joined: Apr 14 2009

    Posts: 122

    1+

    Don't know what to make of this yet

    https://www.zerohedge.com/health/man-behind-global-coronavirus-pandemic

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  • Tue, Jan 28, 2020 - 6:50pm

    Reply to #4
    VeganDB12

    VeganDB12

    Status: Bronze Member

    Joined: Jul 18 2008

    Posts: 181

    2+

    john316jr

    I am sorry for your situation.  What you have described is not in keeping with the current CDC guidelines for healthcare professionals released today:

    https://www.cdc.gov/coronavirus/2019-nCoV/hcp/clinical-criteria.html

    It clearly states that people with fever, cough, difficulty breathing who have been to Wuhan in the last 14 days or had contact with people from Wuhan need evaluation.  This website has links for both state and local departments of health. If you haven’t called both you or someone close to you can still call.

    I hope you both recover soon.

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  • Tue, Jan 28, 2020 - 6:52pm

    #11
    NickAdams10

    NickAdams10

    Status: Member

    Joined: Feb 05 2015

    Posts: 49

    5+

    Large corporations are taking precautions

    My brother’s large multinational financial institution just instituted a two-week work-from-home policy for any employees returning from China. People in the United States are starting to pay attention.

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  • Wed, Jan 29, 2020 - 6:11am

    #12

    sand_puppy

    Status: Platinum Member

    Joined: Apr 13 2011

    Posts: 2143

    6+

    The Unsinkable Titanic Analogy

    Charles has an awesome essay about the difficulty of “getting it” when your (Titanic) boat has taken a fatal hit, but things still look kind of normal at the top deck and you firmly believe that it is unsinkable.

    ———-

    Coronavirus And The “Unsinkable” Titanic Analogy

    Unthinkable doesn’t mean unsinkable.

    As we all know, the “unsinkable” Titanic suffered a glancing collision with an iceberg on the night of April 14, 1912. A half-hour after the iceberg had opened six of the ship’s 16 watertight compartments, it was not at all apparent that the mighty vessel had been fatally wounded, as there was no evidence of damage topside. Indeed, some eyewitnesses reported that passengers playfully scattered the ice left on the foredeck by the encounter.

    But some rudimentary calculations soon revealed the truth to the officers: the ship would sink and there was no way to stop it. The ship was designed to survive four watertight compartments being compromised, and could likely stay afloat if five were opened to the sea, but not if six compartments were flooded. Water would inevitably spill over into adjacent compartments in a domino-like fashion until the ship sank.

    We can sympathize with the disbelief of the officers, and with their contradictory duty to simultaneously reassure passengers and attempt to goad them into the lifeboats. Passengers were reluctant to heed the warning because it was at odds with their own perceptions. With the interior still warm and bright with lights, it seemed far more dangerous to clamber into an open lifeboat and drift off into the icy Atlantic than it did to stay onboard.

    The evidence was undeniable, but humanity’s first response is denial, regardless of the evidence. The evidence that the coronavirus is contagious is undeniable, as is the evidence that carriers who have no symptoms can transmit the virus to others.

    Just as the eventual sinking of Titanic could be extrapolated from the basic facts (six watertight compartments were flooding), so the eventual spread of the coronavirus can be extrapolated from these basic facts.

    But the official global response is “these facts don’t matter,” and so hundreds of airline flights continue to leave cities swept by the disease. That once the virus spreads globally it will impact the global economy is easily extrapolated, but few want to consider the sinking of the unsinkable, so they don’t.

    As a result, the first lifeboats left the doomed ship only partially full. Only when it became undeniable that the ship was doomed did people attempt to get on a lifeboat, but by then it was too late: the lifeboats had all been launched.

    This may be an appropriate analogy to the U.S. stock market, which is widely considered “unsinkable” due to the Federal Reserve’s unlimited ability to create “liquidity” (cash) out of thin air.

    The stock market just had a minor collision with the coronavirus, and few are heeding the warnings, preferring to heed the reassurances that thanks to the omnipotent Federal Reserve, the market is unsinkable, and the party in the First Class deck will continue indefinitely.

    The lifeboats are already leaving, but few have escaped the doomed ship, i.e. sold all their equities.

    When the crowd partying in First Class awakens to the inevitability of the stock market sinking, it will be too late to get on the lifeboat, i.e. sell out at the top.

    A half-hour after the fatal collision, the reassurances are so comforting and credible: how could this great ship sink? Indeed, how could a stock market racing so confidently to Dow 30,000 sink to Dow 20,000 or even 10,000? It’s unthinkable.

    Unthinkable doesn’t mean unsinkable.

    Why Our Financial System Is Like the Titanic (March 15, 2016)

    Here are some informative science-based links on the coronavirus, courtesy of longtime correspondent Cheryl A.:

    Another Decade, Another Coronavirus

    New coronavirus can cause infections with no symptoms and sicken otherwise healthy people, studies show

    Map of Global Case of Wuhan Coronavirus

    Coronavirus contagious even in incubation stage, China’s health authority says

    Preliminary Risk Assessment of Coronavirus Spreading

    Preliminary estimation of the basic reproduction number of novel coronavirus (2019-nCoV) in China, from 2019 to 2020

    Containing new coronavirus may not be feasible, experts say, as they warn of possible sustained global spread

    How fast can biotech come up with a vaccine for the latest outbreak?

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  • Wed, Jan 29, 2020 - 9:26am

    #13

    Mark_BC

    Status: Bronze Member

    Joined: Apr 30 2010

    Posts: 346

    Well danm, I just started trading the markets given the obvious manipulation and was making great returns with Apple. At this rate I’d have a million bucks in half a year. Just my luck…

    I had a call going into Monday’s plunge which I have now exited at a nice profit. And I bought the dip on Monday as well. I think I’ll stay out for a while to see how it all pans out.

    Historically, bad news was good news for the market as this just signified that the plunge protection team would go in and buy it all up until risk-on sentiment returns. Clearly they are doing that now as well.

    The question is, is this too much for them to handle. My opinion is that the spread of the disease will be stifled with draconian measures like we are seeing in China. And it will pass in several months. But that will cause huge economic problems, maybe too much for the Fed to print its way out of.

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  • Wed, Jan 29, 2020 - 10:21am

    Reply to #10
    signalfire

    signalfire

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    Posts: 17

    1+

    That Zerohedge article is reprehensibly slanderous.  He even posted the guy’s picture, email and phone numbers. I hope whoever really wrote that -‘Tyler Durden’ is a pseudonym for any of dozens of posters – is arrested and sued within an inch of his life. We need MORE PhD’s working on this problem, not people worried about being globally tied to a pandemic as if they caused it. Zerohedge is the worse, it’s one step over 4Chan in adolescent BS.

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  • Wed, Jan 29, 2020 - 10:53am

    #14

    Mark_BC

    Status: Bronze Member

    Joined: Apr 30 2010

    Posts: 346

    Does oil price really need to go down? Can’t OPEC just curtail production?

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  • Wed, Jan 29, 2020 - 11:14am

    #15
    BBQ MD

    BBQ MD

    Status: Member

    Joined: Oct 08 2009

    Posts: 17

    4+

    Perfect scapegoat

    Here’s a thought.  What if the global elite have been waiting for a suitable explanation to serve up to the masses regarding the inevitable financial downturn.  Now instead of having to go to war with Russia/Iran we can just blame the coronavirus.  “Sorry about your pension.  Gosh, who could have seen that pandemic coming?  Wow, guess we’re all in this together now, better share the hardship.”  They conceivably could pull off a financial collapse and restructuring on their terms and no-one would be the wiser.  What do y’all think?

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  • Wed, Jan 29, 2020 - 3:17pm

    Reply to #15

    thc0655

    Status: Platinum Member

    Joined: Apr 27 2010

    Posts: 1805

    5+

    Yes, corona is a great scapegoat for what’s coming anyway

    http://www.alt-market.com/index.php/articles/4081-how-viral-pandemic-benefits-the-globalist-agenda

    Global pandemic, whether a natural event or deliberately engineered, actually serves the purposes of the globalist establishment in a number of ways. First and foremost, it is a superb distraction. The general public, overcome with fears of an invisible force of nature that can possibly kill them at any moment, will probably forget all about the much bigger threat to their life, liberty and future – the subsequent collapse of the massive ‘Everything Bubble’ and the globalist “solution” that a pandemic can trigger…

    I have a hard time ignoring the strange “coincidence” of the high level biohazard labs in Wuhan in favor of the idea that the virus was launched by chance due to the odd diets of central Chinese people. Given the evidence it appears that the coronavirus was gestated in a lab, not in someone’s bat and snake soup.  In 2017, scientists outside of China warned that these labs were not secure and that a virus might escape one of the facilities.

    I would use the term “escape” loosely, as there is a possibility that this event was created intentionally. The virus itself has certain hallmarks of being engineered (including its long dormant period without visible symptoms) and the current strain is probably derived from the one the Chinese stole a year ago from a lab in Winnipeg, Canada.

    But it gets even weirder.

    Only three months ago, John Hopkins, the Bill and Melinda Gates Foundation and the World Economic Forum (a hive of self-professed globalists) ran a “pandemic simulation” called “Event 201” specifically focused on Coronavirus.  Not Ebola, or Swine Flu or even Avian Flu – but CORONAVIRUS.  The simulation features the spread of coronavirus in South America, blamed on animal to human transmission (pigs).  The conclusion of the exercise was that national governments were nowhere near ready, scoring 40 out of 100 on their preparedness scale.  The simulation projected over 65 million deathsworldwide.

    Event 201 played out almost exactly as it has been in China today.  Some very disingenuous or perhaps rather stupid people have been arguing that this kind of thing is “normal”, claiming that we are “lucky” that the elites have been running simulations in advance in order to “save us” from a coronavirus outbreak.  I assert that Event 201 was not a simulation but a war-game to study the possible outcomes of an event the globalists already knew was coming.  Set aside the fact that before almost every major crisis event and terrorist attack for the past few decades authorities were running simulations for that exact event right before it happened; does anyone really believe that Event 201 is pure coincidence?…

    …The reason why globalists want a collapse is simple – They need crisis in order to manipulate the masses into accepting total centralization, a global monetary system and global governance. They are also rabid believers in eugenics and population reduction. At the very least, a global pandemic is a useful happenstance for them; but the timing of the coronavirus event and their highly accurate “simulation” only three months ago also suggests their potential involvement, as it comes right as the implosion of the Everything Bubble was accelerating.

    Consider this: Even if a pandemic does not kill a large number of people, it still disrupts international travel, it disrupts exports and imports, it disrupts consumer behavior and retail sales, and it disrupts domestic trade. If it does kill a large number of people, and if the Chinese government’s response is any indication, it could result in global martial law. With many economies including the US economy already in a precarious balancing act of historic debt vs. crashing demand and useless central bank repo market intervention, there is little chance that the system can withstand such a tsunami.

    Make no mistake, the crash has already begun, whether the virus hits the US hard or not. The only question is, will this be the trigger event that accelerates the collapse process that is already in motion?

    I took my time in publishing this article because I believed it was important to first watch the Chinese, CDC and WHO response to the virus. If they dealt with the situation quickly then there was a chance that it would have only minor influence on the financial system. They did not deal with the situation quickly or decisively. In fact, over 5 million people left the Hubei region of China before active quarantine and treatment procedures began. The situation has spiraled out of control in China and it is clear that the government is now lying through its teeth about the number of sick and dead.

    I would not be surprised if we discover in the next two weeks that the death tally is in the thousands, and the sickness rate is actually in the hundreds of thousands. The fact that China has now quarantined over 50 million people in 16 cities suggests the danger is much higher than they have admitted.  If this is the case, then at the very least, the Chinese economy is about to take a massive hit. If the virus doesn’t spread, the economic damage will….

    …With global supply lines frozen and travel eventually restricted, trade will stall.  There is no way around this.  This is not just about China, it is about all nations.  And, ultimately, this is not even about the coronavirus, it is about the financial time bomb that the globalist establishment created.  It is about our economic interdependency and the house of cards we have become.  In the wake of calamity, the globalists will call for even MORE interdependency.  They will claim tragedy struck because we were not “centralized enough”….

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  • Wed, Jan 29, 2020 - 8:23pm

    #16

    Adam Taggart

    Status: Platinum Member

    Joined: May 25 2009

    Posts: 2923

    9+

    We Just Heard A Loud 'Crack!'

    China just updated its latest totals of coronavirus infected/dead.

    They confirm that the virus is indeed spreading at a geometric rate.

    That type of growth is hard for many people to wrap their brains around — but it means for every time increment, it grows more than ALL the previous time periods combined. That’s why the potential infected population projections get into the millions so quickly.

    We’ve been predicting that once the market finally wakes up to the reality that the coronavirus needs to be taken seriously and has a non-dismissable potential to be VERY bad, the long overdue sell-off will begin.

    Well, this latest batch of data may have just been that wake-up call.

    All the major indices are down in the aftermarket and volatility and gold are up. And that’s despite blow-out earnings announced by the major stock market darlings (Apple, Microsoft, Tesla, etc)

    The “”markets”” have been so insane over-extended for so long, nothing — I mean nothing — could dent the exuberance. Until perhaps now.

    This just has the feel of a drunk waking up after a bender and realizing, “Wow, things really got out of hand. I need to reel it in.”

    I’ll be watching the aftermarket action late into the night.

    And if somehow this isn’t the market’s breaking point, I’m confident we’ll hit it within a matter of days.

    If indeed there are hundreds of thousands of infected by the end of next week (which the current geometric spread predicts), the market just can’t shrug that off. In fact, it will likely go into full freak-out mode.

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  • Wed, Jan 29, 2020 - 8:56pm

    #17
    Jeff

    Jeff

    Status: Member

    Joined: Aug 17 2012

    Posts: 64

    1+

    Latest stats?

    I got 7678 confirmed 170 deceased….did you get different

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  • Wed, Jan 29, 2020 - 11:06pm

    Reply to #15
    Sparky1

    Sparky1

    Status: Member

    Joined: Jul 21 2016

    Posts: 571

    1+

    Rahm's Rule of Crisis Management: Never let a serious crisis go to wa$te.

    Rahm’s Rule: “You never want a serious crisis to go to waste,” he said. Why? Because “it’s an opportunity to do things you could not do before.”  (Source)

    A pandemic would serve as a potent catalyst to usher in a cashless monetary system as a frightened populous would be adverse to transacting in “dirty” or potentially infectious, contaminated currency.

    While I truly believe and bemoan the severity of the growing nCoV epidemic and its potentially devastating human, social and economic impacts, I also believe that TPTB are at-the-ready to exploit opportunities this crisis–which they well may have helped to create and/or perpetuate.

    Case in point:  “FEMA just DOUBLED a contract for 4* Billion Dollars in case of a Presidential Emergency Declaration. The contract was just let at the 1st of January and 15 days later something happened to make FEMA double the budget. The primary unplanned for situation that pops to mind during this time frame is the SARS-like outbreak coming from CHINA.” [*Sparky1 edit, actually $3.66B] (Source)

    Excerpt from the federal announcement of the doubling of the award from $610M to  $1.220B for each of three contractors:

    “Professional consultants, engineers and non-professionals are required to complement the efforts of FEMA PA staff, and provide a surge capability when necessary….as authorized under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §5121-5206 (Stafford Act), FEMA provides supplemental Federal disaster grant assistance to applicants…so that communities can quickly respond to and recover from major disasters or emergencies declared by the President.”

    “There are currently three (3) large vendors that provide the current PA-TAC IV services. Each vendor currently has an IDIQ contract based on geographical zone/area….The ceiling for each of the contracts will be increased from $610 million to $1.220 billion (an increase of $610 million each).”

    https://beta.sam.gov/opp/844a15b48a8546b3affd9c0e146dde63/view?keywords=fema&sort=-modifiedDate&index=opp&is_active=true&page=1

    Whether for nCoV, war, extreme weather disasters, etc., apparently insiders were already well-positioned to leverage and profit from the latest crisis de jour.

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  • Thu, Jan 30, 2020 - 2:48am

    #18
    miltonics

    miltonics

    Status: Member

    Joined: Nov 30 2008

    Posts: 1

    1+

    The Only Real Way Out

    The only real way out is through. I wish you all luck!

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  • Fri, Jan 31, 2020 - 7:56am

    Reply to #10
    richcabot

    richcabot

    Status: Bronze Member

    Joined: Apr 05 2011

    Posts: 228

    Not slanderous if it's true

    The article, along with the previous one about the center of the epidemic being the same city where China has its only level 4 biohazard research facility, makes a very strong case that he is responsible for the epidemic.   He ought to be named and held accountable.  The mainstream media have excoriated people on far less evidence.

    I agree that posting his phone number is over-the-top.  All that will do is get trolls to call him and hassle him.   Any journalist could have found his number easily enough.  Ironically it will be harder now since he’s sure to disconnect that number.

    It’s unlikely that the Chinese government will admit their culpability in the problem, nor that mainstream journalists will research the root cause.  I’m glad somebody is.

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