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Week in Review 10 Key Points

  1. The WHO finally declared the coronavirus a global pandemic. It was obvious to anyone with a bit of common sense weeks ago.
  2. The NBA and NFL both suspended the season indefinitely after a Utah Jazz player tested positive for the coronavirus.
  3. 39 states in the US have declared states of emergency. There are numerous school closures and business disruptions.
  4. Trump addressed the nation Wednesday night and delivered a terrible performance in trying to reassure the nation. In his speech, Trump suspended travel from the EU, more specifically the passport free Schengen Area.
  5. Stocks crashed over 9% on Thursday. A bear market officially started.
  6. 75% of companies note supply chain disruptions as coronavirus cases growing outside of China at an exponential rate.
  7. On Friday Trump declared a National Emergency. In contrast to Wednesday, he gave an excellent speech accompanied by US business leaders and the market rose over 9%.
  8. The bond market was in a state of stress all week. There are major liquidations in bond funds and the bid-ask spreads in the 30-year bond are the biggest on record. Even Friday stock market rally did not calm the bond market.
  9. Gold, normally a safe haven, followed the bond market. Higher treasury yields are generally seen as bad for gold.
  10. Bitcoin crashed 50% in a 24 hour period on March 12-13 and recovered a bit of those losses.

1: Officially a Pandemic

The World Health Organization says the Coronavirus, COVID-19 Is Now Officially A Pandemic.

The COVID-19 viral disease that has swept into at least 114 countries and killed more than 4,000 people is now officially a pandemic, the World Health Organization announced Wednesday.

"This is the first pandemic caused by a coronavirus," WHO Director-General Tedros Adhanom Ghebreyesus said at a briefing in Geneva.

Also note that Trump Classifies Coronavirus Info.

That was not a smart move. It creates frears of "What is Trump hiding?"

2: NBA and NHL Suspend Seasons

On March 11, I noted NBA Suspends All Games, Sports Jackass of the Year Awarded

I gave the "Sports Jackass of the Year" award" to Utah Jazz superstar Rudy Gobert who mocks the coronavirus by touching every microphone, recorder and reporter in the media room two days ago. The next day he tested positive for the virus and the NBA suspended the season. The NHL suspended the season the following day.

3: 39 States in the US Have Declared States of Emergency

Washington, California, Maryland, Kentucky, Utah, New York, Florida, Oregon, Indiana, New Jersey, Colorado, Iowa, Ohio, Pennsylvania, Illinois, Massachusetts, North Carolina, Michigan, Arizona, Connecticut, Louisiana, Virginia, Delaware, Montana, Nevada, Arkansas, Kansas, Wisconsin, Tennessee, Alabama, New Hampshire, South Carolina, Idaho, Nebraska, Missouri, Minnesota, Georgia, New Mexico, Texas.

School closures and other disruptions are far too numerous to mention.

Note that New York will Establish a “Containment Area” Using the National Guard.​

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Case map courtesy of the New York Times.

Please play that video.

It highlights extreme incompetence at the CDC, the US Center for Disease Control.

The most amazing thing about the video is that is it by a Fox News journalist and Fox rarely criticizes anything associated with Trump.

I believe but cannot prove, Trump wanted the US to have its own tests with a "Made in USA" label.

If it was not his call, Trump would be blaming, firing, or belittling the person responsible.

Regardless, the CDC is his responsibility.

4: Trump Addressed the Nation Wednesday Night

I commented A Clearly Rattled Trump Bans All Travel From EU Starting Friday

President Trump was clearly rattled and nervous as he addressed the nation tonight regarding the coronavirus.

Trump banned all travel from Europe, except the UK, starting travel. This seems to apply to shipments of goods as well. "Anything coming from Europe to the United States is what we are discussing,” said Trump.

he WSJ commented "The president suggested the restrictions would apply to goods shipped into the U.S. from Europe."

Trump misspoke. The White House issued a correction.

Fortunately, Trade with Europe is not blocked.

5: Stocks Crashed Over 9% on Thursday

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That is one of the the most wild weeks in history.

It's likely a recession has started. If not it soon will.

6: Massive Supply Chain Disruptions

In a special report the ISM reported 75% of Companies Suffer From Coronavirus Supply Chain Disruptions

Nearly 75 percent of companies report supply chain disruptions in some capacity due to coronavirus-related transportation restrictions, and more than 80 percent believe that their organization will experience some impact because of COVID-19 disruptions. Of those, one in six (16%) companies report adjusting revenue targets downward an average of 5.6 percent due to the coronavirus.

The story the data tells is that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak,” said Thomas W. Derry, Chief Executive Officer of ISM. “For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States -- even if they can get orders filled.”

7: Trump Declares a National Emergency on Friday

Real Clear Politics reports President Declares National Coronavirus Emergency, Press Conference With Healthcare CEOs

In contrast to the Wednesday night fiasco, Trump delivered a very good performance on Friday. The stock market rebounded over 9% erasing the losses on Thursday.​

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Look at that map closely.

Those proclaiming this is no worse than the flu do not understand exponential math.

Italy went from 30 cases to 21,000 cases in little over a week.

Scroll to Continue


On February 26, in a White House Briefing, Trump foolishly discussed the then 15 total cases in the US.

"When you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done," said Trump.

I was certain the moment Trump made that comment that it was an enormous mistake.

15 cases is now 2,499 in just 17 days.

15-30-60-120-240-480-960-1,920-3,840-7,680-15,360-30,720-61,440-122,880-245,760-491,520-983,040 ... etc.

That is the path we are on. In 17 days, the number of US cases has doubled over 7 times.

The number of cases are now doubling every 2-3 days. If the same rate continues, then in another week or two we are going to be looking at 50,000 to 75,000 cases. If it continues at that rate for several weeks we are now looking at millions of cases.

Yes, most of these are mild cases. But 10-20% or them won't be. In Italy, they have run out of beds and supplies.

Doctors are making choices based on age and other factors who to treat or not. The serious cases not treated are likely future deaths.

Those downplaying these risks are fools.

Yet, I expect a lot of "I told you so" comments from the fools.


Because the measures we are now taking: cancelling sports events, schools, big gatherings, etc., and a ramp up in test availability (finally!), will likely short circuit that exponential progression.

That is my optimistic comment for the day.

Here's another: I believe Trump finally sees how serious this is.

8: Bond Market Stress

The bond market was in a state of stress the entire week.

Given that a deflationary crash is underway with the Fed about to slash rates to zero, the yield on the long bond ought to be dropping. Instead, yields on the 30-year and 10-year treasuries soared.

I commented Bond Market Dislocation: What the Hell is Going On?

Lacy Hunt at Hoisington Investments, one of the largest bond firms in the world, said it was redemptions: "Pension plans, nonprofit corporations, leveraged hedge funds and others are selling what they have a profit on, not what they need to," said Lacy in a phone conversation.

Bid-ask spreads on treasuries were at the widest level in history.

Not even Friday's rally helped so perhaps there are still additional factors.

Hoping to quiet things down, the Fed announced on Thursday it would Inject $1.5 Trillion in Liquidity.

The market responded with a short pop then continued to decline for the rest of the day, closing down about 10%.

9: Gold Sells Off

Gold is normally a safe haven in times of liquidity stress. However, higher treasury yields are generally seen as bad for gold, and gold sold off with the long end of the yield curve.

This could be a continuation of taking profits where they are to be found, but if pension plans are selling gold and treasuries for more stocks I think they will soon regret that move.

10: Bitcoin Plunges 50% in 24 Hours

In a stunning one day wipeout Bitcoin fell about 50%. I commented Bitcoin Finally Finds Support at the $4,000 Level: What's Next?

National Lockdown in Spain

The New York Times reports Spain Imposes Nationwide Lockdown to Fight Coronavirus

Faced with rising numbers of coronavirus infections in Spain, the country’s government on Saturday ordered all citizens to stay in their homes other than to buy food, go to work or seek health care, or to assist the elderly and others in need.

The government also ordered all schools, restaurants and bars to close, extending measures that various regional authorities, including in Madrid and in Catalonia, had taken on Friday.

That is what China did to stop the spread. Italy did as well, but too late. And now Spain joined the party.

Don't say it will never happen here: New York established a “Containment Area” Using the National Guard.​

Trump bragged about shutting down air traffic from China but he was way too late on Europe and other places.

Nonetheless, it was better late than never.

Reflection on Stock Market Prices

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Recession Started

Yesterday I asked, How Much Recession Warning Did You Expect?

I believe a recession has started, if not it will start in April.

There are too many disruptions in airlines, sports, schools, cancelled vacations, and supply chain details that make a recession inevitable.

The stock market gyrations alone will disrupt spending plans on big ticket items like cars.

The market rebounded on Friday, as expected from such deeply oversold levels. But earnings estimates are crashing and the stock market is still nowhere close to being reasonably priced.

Mike "Mish" Shedlock