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David Fuller and Eoin Treacy's Comment of the Day
Category - Global Middle Class

    Biden Reopens Path to Nomination That Was Out of Reach Days Ago

    This article by Justin Sink for Bloomberg may be of interest to subscribers. Here is a section: 

    In politics, you have to win to win. And in the crucial Super Tuesday primaries in 14 U.S. states, Biden did just that, and Democratic voters singularly obsessed with defeating Trump finally began coalescing around their candidate.

    There’s still a long road ahead for the former vice president. His chief rival, Bernie Sanders, won California -- the biggest prize of the entire nominating race -- where a runaway victory could give the Vermont senator enough delegates to blunt Biden’s gains on Tuesday. And the former vice president’s turnaround was made all the more remarkable because of his plunge from front-runner status, bruised and battered by a meandering campaign, lackluster fundraising and trademark gaffes.

    Still, the whirlwind three days following Biden’s convincing win in South Carolina -- which propelled top rivals like Pete Buttigieg and Amy Klobuchar back the former vice president -- underscored the extent to which Democrats were ready to unite behind anyone perceived as ready to take on Trump.

    “Just a few days ago the press and the pundits had declared the campaign dead,” Biden told supporters in Los Angeles. “I’m here to report, we are very much alive.”

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    RBA Cuts Rates to 0.5% as China Slowdown Continues

    This article by Michael Heath for Bloomberg may be of interest to subscribers. Here is a section:

    “The coronavirus has clouded the near-term outlook for the global economy and means that global growth in the first half of 2020 will be lower,” Lowe said. “It is too early to tell how persistent the effects of the coronavirus will be and at what point the global economy will return to an improving path.”

    In this case, though, Australia’s central bank isn’t going to have to face the downturn alone, with fiscal support in prospect.

    “The Australian government has also indicated that it will assist areas of the economy most affected by the coronavirus,” Lowe said. Before the RBA meeting, Prime Minister Scott Morrison said the Treasury is working closely together with the other agencies “to address the boost that we believe will be necessary.”

    Morrison urged major banks to pass on any RBA cut. The four top lenders have all since confirmed that mortgage rates will be reduced by the full amount.

    The RBA now has only one 25 basis-point cut left in the locker before it reaches its effective lower bound of 0.25%. Lowe will find himself dragged toward quantitative easing, should the economy need further monetary stimulus.

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    Treasury 10-Year Yield Sets Record Below 1% on Virus Fears

    This article by Liz Capo McCormick for Bloomberg may be of interest to subscribers. Here is a section:

    Though the Fed met Wall Street’s hopes for aggressive action with its half-point reduction, Chairman Jerome Powell seemed to unnerve markets by saying it’s unclear how long the virus’s impact will last. Traders were already pricing in another rate cut later this month, with more to come in June.

    “The market is trading right now on a lot of fear and uncertainty,” said Gary Pollack, head of fixed income at DWS Investment Management. “The Fed certainly didn’t bring calm, and the virus continues. The Fed’s relatively large move also made people wonder what they know that we don’t.”

    The central bank’s decision came a few hours after Group-of-Seven finance chiefs issued a coordinated statement saying they were ready to act to shield their economies from the virus. Policy makers faced pressure to act after the OECD warned the world economy faces its “greatest danger” since the 2008 financial crisis.

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    Brazil Confirms Coronavirus Case, the First in Latin America

    This article by Simone Iglesias and Fabiola Moura for Bloomberg may be of interest to subscribers. Here is a section:

    A 61-year-old Brazilian man who lives in Sao Paulo was infected during a recent trip to Northern Italy and tested positive upon returning to the country, Health Minister Luiz Henrique Mandetta said Wednesday at a news conference in Brasilia. The patient, who traveled via France on the way back to Brazil, is doing well and is at home, a Sao Paulo state official said.

    “We’ll have to see how the virus reacts in a tropical country in the middle of summer,” Mandetta said. “We still can’t say how lethal this virus will be.”

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    Coronavirus threatens the global economy with a 'sudden stop'

    Thanks to a subscriber for this article by Ambrose Evans-Pritchard for the Telegraph. Here is a section:

    Contagion experts Peter Sandman, Ian Mackay, and Jody Lanard sum up my view in this passage from Past Time to Tell the Public: It Will Probably Go Pandemic, and We Should All Prepare Now:

    “We are near-certain that the desperate-sounding, last-ditch containment messaging of recent days is contributing to a massive global misperception about the near-term future. One horrible effect of this continued 'stop the pandemic' daydream masquerading as a policy goal: it is driving counter-productive and outrage-inducing measures by many countries against travellers from other countries, even their own citizens back from other countries.

    “But possibly more horrible: the messaging is driving resources toward 'stopping' and away from the main potential benefit of containment – slowing the spread of the pandemic and thereby buying a little more time to prepare for what’s coming.”

    For readers who can spare the time, I suggest tuning out media noise – much of it dwelling on the malevolent distraction of which individual may have been spreading Covid-19 – and going straight to research papers being released daily by PubMed Central, the data bank of the US National Library of Medicine.

    That way you avoid the sort of misunderstanding I just heard on the BBC, which stated that the death rate is comparable to flu. No, it is not. The average morbidity of flu annually is 0.1pc; Covid-19 is an order of far greater magnitude.

    The latest tracking data as of Feb 22 (unreliable, but the best we have) is that the mortality rate is 4pc in Wuhan, 2.8pc in Hubei, and 0.8pc in other regions of China, though all figures are creeping up as slow deaths hit the data.

    There can be long lag times after infection so it is too early to infer ratios from South Korea, Italy and Iran, but this is surely more like the Spanish Flu of 1918 than anything we are used to. Chinese data suggests that roughly 14pc of those infected over the age of 80 are dying.

    You can read most of the PubMed abstracts free and can see what is coming out of labs in China – some of them excellent – or in Hong Kong, Korea, Japan, Europe and North America. There are already 80 peer-reviewed papers. The unfiltered findings are arriving almost in real time. They give you an extra edge.

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    EU's Barnier Hits Boris Johnson With Brexit Trade Ultimatum

    This article by Ian Wishart for Bloomberg may be of interest to subscribers. Here is a section:

    “Our overriding priority is to retake control of our laws,” Slack told reporters in London as Barnier spoke in Brussels. “The British public were promised we will take control of our fishing waters and that’s what we’re going to do.”

    The EU does have level playing field conditions in other trade deals -- including its tariff-free agreement on goods trade with Canada that the U.K. wants to replicate -- but they aren’t as stringent. The EU says it needs to be tougher with the U.K. because the British economy is so close and so large.

    That is reflected in the final negotiating mandate European ministers approved on Tuesday. In it, the bloc requires the U.K. to broadly follow any future changes in EU rules on competition policy, environmental protections, tax, and labor law.

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    Risk Parity Nirvana; Buyer's Compendium - 9 Screens Across Growth & Value

    Thanks to a subscriber for this report by Mike Wilson for Morgan Stanley. Here is a section:

    Gilead Surges After WHO Comments on Coronavirus Drug Testing

    This article by Drew Armstrong and Bailey Lipschultz for Bloomberg may be of interest to subscribers. Here is a section:

    Remdesivir is the “one drug right now that we think may have efficacy,” Bruce Aylward, an assistant director-general at the World Health Organization, said at a briefing in Beijing. WHO officials and international scientists are in the country assessing the outbreak.

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    Japan Limits Large Gatherings to Thwart Coronavirus

    This article by Alastair Gale for the Wall Street Journal may be of interest to subscribers. Here is a section:

    Masahiro Kami, an infectious diseases expert, said he was skeptical that the suspension of some public events would have a significant impact on the spread of the virus. “Commuting on a packed train, for instance, is way worse than taking part in the Tokyo marathon,” he said.

    Dr. Kami, who heads a nonprofit organization called the Medical Governance Research Institute, said a media focus on the few cases of serious illness from coronavirus infection in Japan had created a panic over the need to cancel events.

    While Japan initially had a handful of cases involving people who had come from Wuhan, the center of the epidemic in China, or had direct contact with someone from Wuhan, a surge of cases in the past week included many whose path of infection wasn’t clear. The cases span from Hokkaido in the north to Okinawa in the far south.

    More than 1,000 people disembarked from the Diamond Princess cruise ship between Wednesday and Friday, and they entered Japan without restrictions on their movements. All of those passengers tested negative for the virus, but in some cases people have tested positive after a negative test—including two cases reported Friday in Australia, which sent a flight to Japan to repatriate citizens who had been on the ship.

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