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It is hard to know what to say about the way Trump is handling the COVID-19 emergency. Inept, deluded and denialist would be a start but would hardly cover it. I think we are getting close to a situation where the mishandling is beginning to become a threat to the stability of the American State. Remembering his age the incidence if viral infection within the White House (as close already as Ivanka Trump) is actually an existential threat to a mad President!
In the UK the borders are finally closing as the corpses pile up – especially from nursing homes – and control of the virus still seems to be a distant dream! More than 32,000 deaths in a population of 60 million is awful indeed!
In OZ were are awaiting the effects of the Government Roadmap to play out over the next two months…
We are still living in a pretty uncertain time….
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Major Issues.
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Capitalism under fire as weak firms bailed out in a world without risk
Stephen Bartholomeusz
Senior business columnist
April 20, 2020 — 1.24pm
The polarised debate over whether or not the federal government should bail out Virgin Australia is a fragment of a larger debate about the nature of capitalism that started in 2008 and has been given even sharper focus by the response of governments and central banks to the coronavirus pandemic.
Before the global financial crisis, it was generally only major banks that, because of their central roles in financial systems, were deemed too big to be allowed to fail.
Even as global banking regulators significantly toughened capital and liquidity standards in the aftermath of the crisis, the key central banks have pursued policies that appear to have been designed to avoid broader corporate failures.
The enormous floods of liquidity with which the US Federal Reserve, the European Central Bank and Bank of Japan have swamped financial systems and markets since 2008 have kept afloat non-banks that should have sunk.
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China needs a better grasp of democracies like Australia
China's ambassador made the same mistake that dictatorships always do with democracies: mistake their querulous nature for weakness.
May 3, 2020 – 6.45pm
Some people have an instinct for politics. They understand public moods, they know the media follows the public more than it leads the public, and they can act in a way that achieves their objectives without alienating the public.
Our greatest prime ministers have been like that. Robert Menzies, John Howard and Bob Hawke are great examples of political leaders who achieved much and did so with an instinctive understanding of the public mood.
We've seen a couple of examples over the past week of people who have no understanding at all of the public mood and who, through their blundering public interventions, have failed to achieve their objectives. They need political advisers. They need somebody to tell them about the public. They need to have a better understanding of the zeitgeist of the country.
One is the estimable Andrew "Twiggy" Forrest. He’s a good man and he has good intentions, but embarrassing the Health Minister by blindsiding him with China's Victorian consul-general destroyed his objective. His plan was to publicise his role in purchasing much-needed testing equipment from China. But the only story was the gaffe with the Chinese consul-general. Objective lost!
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Five investment steps to a profitable crisis
Just because equity markets may not look attractive in the near term doesn't mean you should be doing nothing.
May 4, 2020 – 9.37am
The seeds of long-term portfolio underperformance are sown when investors step away from disciplined asset allocation.
Amid today’s pandemic-driven crisis – and almost certain global and Australian recessions – this might look like a decision to liquidate a portfolio to cash, with the vain hope of trying to time re-entry.
Or maybe it looks like keeping 100 per cent of the cash on the sidelines when some assets and selected investments are much cheaper than just a couple of months ago.
The challenge is that equity markets, after falling 35 per cent from their pre-coronavirus highs, have rallied more than 20 per cent, taking most valuation metrics back to where they were before the crisis.
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Australia, EU bypass Trump on global trade
May 4, 2020 – 12.00am
London/Washington | Australia has bypassed the United States by teaming up with the European Union and China to back a new global trade dispute umpire, even as Beijing lashes Canberra's call for an inquiry into the global coronavirus pandemic.
The new system will replicate the structure and functions of the WTO's Appellate Body that the Trump administration last year put into suspension by refusing to allow any new judges to be appointed.
China has framed its backing for the new arbitrator as proof of its support for multilateralism while the US is now virtually isolated but, as trade analysts note, that is unlikely to alarm the White House.
Trade Minister Simon Birmingham said Australia welcomed the "participation of the EU, China and numerous other partners in this attempt to maintain a functional dispute settlement system within the WTO".
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https://www.afr.com/companies/financial-services/asic-takes-aim-at-risky-term-deposit-alternatives-20200507-p54qqo
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https://www.afr.com/companies/financial-services/asic-takes-aim-at-risky-term-deposit-alternatives-20200507-p54qqo
ASIC takes aim at risky term deposit 'alternatives'
May 7, 2020 – 5.15pm
Australian
Securities and Investments Commission deputy chairman Karen Chester has
warned savers that even modest increases in fixed income returns
offered by investment firms come with "significantly higher risk".
Ms
Chester's remarks came as the corporate watchdog ramped up its
surveillance of fixed income product advertising, warning the public to
beware of risky products being pitched as alternatives to safe,
government-guaranteed term deposits.
Volatile sharemarkets and record low interest rates are forcing more investors to invest “significant sums” in higher-yielding alternatives to term deposits, Ms Chester said.
She
said products claiming to be like term deposits “spruiking even a 2 or 3
percentage point higher return than a term deposit represent
significantly higher risk” than money at the bank.
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Banks stretched as economic cost mounts
May 7, 2020 – 7.03pm
State
and federal leaders will move on Friday to restart the economy as
quickly and safely as possible, as new data on the economic cost shows
the banks are wearing up to $160 billion in loan payment deferrals while
half the entire workforce is on welfare or wage subsidies.
In
one of its most significant meetings so far, the national cabinet will
meet on Friday to sign off on the reopening of as many businesses as
possible over the next two months.
The
relaxation of restrictions will be done in three phases, starting in
days and with each phase separated by an "epidemiological timeline'' of
roughly four weeks, so authorities can monitor the health risk before
progressing to the next stage.
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Bushfire Crisis And Climate Policy
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Logging likely had significant effect on summer fires: scientists
By Miki Perkins
May 6, 2020 — 1.00am
Logging native forests increases the severity and risk of bushfires and likely had a significant effect on Australia's unprecedented summer fires.
New research from five scientists published in Nature Ecology & Evolution on Wednesday finds that public debates about the links between climate change and bushfires are warranted and should prompt action, but the contribution of logging to bushfires also needs greater scrutiny.
And, unlike much of the action needed to halt global warming, land management is within the control of Australians, write the scientists from the Australian National University, Macquarie University and the University of Queensland in their review of evidence.
There are a number of ways Australia's past and contemporary logging regimes have made forests more flammable and fire prone, their research finds.
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Coronavirus And Impacts.
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Australia can eliminate COVID-19
Elimination of COVID-19 in Australia would increase economic output by as much as 50 per cent, as compared to controlled adaption, the Morrison goverment's policy.
May 3, 2020 – 9.11am
As we move into May, we are expecting the national debate on COVID-19 to evolve.
As things stand there is a dominant narrative, where the national cabinet presides over a sequenced relaxation of social distancing protocols.
This path accepts some level of community-based transmission of COVID-19 as a reality, and seeks to manage and mitigate, and to adapt the economy as well.
At the fringe, there are calls for a rapid reopening, in the context of the shutdown being an overreaction. There is an odd lot involved: talkback radio hosts, failed libertarians, along with some fund managers who were hurt in March.
Misinterpreting Sweden’s experiment is a unifying theme, as is criticism of the precautionary spend on ICU capacity, even if ventilators can be redeployed, sold for profit or donated internationally for diplomatic gain.
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Economists warn of a zombie recovery
Welcome to the new economic twilight zone that is likely to be a feature of the Western world for several months to come.
Ben Hall and Daniel Dombey
May 3, 2020 – 4.40pm
Spain will be open for business this week. But, by appointment only. Having implemented one of the toughest coronavirus lockdowns in the world over the past six weeks, the Spanish authorities will gradually relax some of the restrictions, including allowing smaller non-food shops to reopen their doors.
But there is a catch: at many shops, customers will first have to book.
Daniel Moratilla, who runs Bike Brothers, a bicycle shop near Madrid’s Casa de Campo park, already has 15 appointments lined up for Monday and expects to have 30 to 40 a day thereafter. The booking system is supposed to be a temporary safeguard to limit the risk of contagion, but Mr Moratilla will keep it going because his 70-square-metre shop is too small to allow social distancing between his customers.
“What else can we do? We have to adapt,” he says.
“It’s as if we are doctors or dentists,” says Maximino Sordo, who runs a shop in central Madrid with no bookings yet for next week. “But we are a hardware store.”
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Economists need to abandon their comfort zones to deal with COVID-19
Imagining how the pandemic will play out will require more creative and complex thinking than we see in most mainstream economics today.
May 4, 2020 – 10.01am
I am always surprised by how linear most economic thinking is. Economists take a stand on a particular issue — free trade is either working or it isn’t; regulation is needed or is not — and then refuse to leave their silos, even when the real world turns out again to be a messy and complex place.
The profession, sadly, is not as variegated — yet. It’s true that since the 2008 financial crisis we have moved from the neo-classical notion that the invisible hand is always right to a world in which economists also consider human bias, politics and institutional realism when crafting their models.
Yet there’s still a general presumption that countries, companies, markets and individuals will eventually reset to “normal”.
Linear systems and baseline reversion to equilibrium is generally assumed. And efficiency rather than resiliency is encouraged.
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How JobKeeper influenced firms to keep on staff
More than four in 10 businesses say the government’s JobKeeper program influenced their decision to keep on staff through the COVID-19 crisis, even as separate data showed job advertisements collapsed by 50 per cent in April.
The third of the special Australian Bureau of Statistics’ business surveys, conducted over the week commencing April 22, also revealed around three in four businesses said they expected the blow to turnover from the pandemic to last for the next two months.
The ABS report showed that three in five companies had or intended to enrol in the $1500 a fortnight wage subsidy program. Of these, close to three-quarters expected more than half of their employees to be eligible for the scheme.
Separately, ANZ revealed there was a 53 per cent plunge in job ads in April, almost five times the previous record monthly fall of 11 per cent.
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NSW preparing for a COVID-19 surge in mid to late winter
May 5, 2020 – 12.01am
Senior health professionals in NSW have received a confidential briefing cautioning that the state is preparing for a possible surge in COVID-19 cases in July and August.
Doctors and public hospitals in the state have been briefed on modelling by the NSW health department that aims to keep this late-winter surge under control.
However, a NSW Health spokesperson said "NSW Health is not being informed by any modelling predicting a specific surge in COVID-19 in July-August".
In low temperatures, viral transmission opportunities are high because people are more likely to huddle.
"NSW Health is continually reassessing the impact of restrictions and the likelihood of any increase in infections as restrictions are eased."
As the impact of lifting restrictions is uncertain, the spokesperson said it was likely they would be lifted gradually to allow the impact to be assessed.
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COVID-19 shutdown leaves other life-saving medical research on hold
By Stuart Layt
May 5, 2020 — 10.53am
Australia and the rest of the world will be months behind the eight-ball on vital medical research on the other side of the coronavirus pandemic, experts warn.
The pandemic has caused massive disruption to medical research, with many universities halting their research programs.
In some cases researchers have been reallocated to help find treatments and vaccines for SARS-CoV-2. Many scientists have had to isolate at home, doing what work they could remotely.
Professor Michael Good from Griffith University's Institute for Glycomics has published an editorial paper with his colleague Professor Stephanie Yanow from the University of Alberta, after both became worried about the sudden shutdown of non-covid scientific work.
“All new non-covid research has been put on hold,” Professor Good said.
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Better way for retirees to ride out COVID-19 storm
Rather than flounder in the face of dividend cuts, income seekers can use a different approach that smooths out volatile years.
May 4, 2020 – 10.15am
While reduced dividends from the big banks may have irritated retail shareholders, many investors (particularly retirees who use the popular "income-oriented" strategy to fund their retirement) are understandably bracing themselves for the anticipated slash in payouts across the Australian sharemarket.
But this need not be the case.
The income-oriented strategy – which entails constructing portfolios of investments that have high income returns that either meet or exceed spending needs – appeals to many because it suggests that by only spending the income that has been paid out, the underlying assets are not touched, which means the strategy should theoretically outlast your retirement.
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Coronavirus: Pandemic unleashes internal conflict for liberals
Around the world and in Australia economic recovery from the COVID-19 attack is generating an ideological conflict in right-wing politics between two schools — pro-market economic liberals and pro-government interventionist conservatives keen to use state power.
The contrast is monumental and the coming struggle is irresistible. This pandemic has seen the greatest recruitment of state power since the war to salvage economies in the form of huge spending, wage subsidies, expanded social welfare, controls on human contact, support for companies and emergency liquidity — yet governments, including the Morrison government, want recovery based on business, seeking a pro-market, competitive, anti-protectionist restoration of the liberal economic order.
Not surprisingly, it won’t be that easy. Everybody agrees there is no simple retreat to the pre-virus economy. But economic liberals and interventionist conservatives see the future in vastly different ways. Critically, this conflict is about both means and ends.
The liberals want an economy even better geared to pro-market, pro-productivity reforms to generate growth, with Josh Frydenberg saying the “values and principles” that guided Coalition reforms in the past “must guide us again in the future”. The values he lists are personal responsibility, rewarding effort, “unleashing the power of dynamic, innovative and open markets”, private enterprise spearheading job creation, rejection of higher taxes, reducing business costs and being “vigilant” against rising “protectionist sentiment”.
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Old pathology samples show COVID-19 was in circulation last year
May 6, 2020 – 10.19am
Researchers are looking at old pathology samples to find clues to the COVID-19 pandemic and bits of evidence have already been found that could alter the story.
Pathology laboratories often freeze patient specimens so doctors can go back and track a disease. This is also routine for many clinical trials.
Now defrosted blood and respiratory samples are being re-examined around the world, including Australia, and are beginning to yield intelligence showing the virus was probably around before it was officially acknowledged.
Some say this is not surprising while others say this could back-date exponential curves by 30 or more days, questioning trajectory modelling and patterns of spread.
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CSL starts Aussie production of COVID-19 Immunoglobulin
May 6, 2020 – 8.45am
Blood products giant CSL has commenced development of its COVID-19 fighting immunoglobulin product at its Melbourne-based Broadmeadows facility, using the antibodies from plasma of recovered coronavirus patients.
The development is the first step toward commercialising the investigative product, targeted at critically ill patients, and will be conducted in two phases.
The first phase will involve a small batch of COVID-19 Immunoglobulin being produced to be used to develop tests to detect the presence of the antibodies that fight the SARS-CoV-2 virus that causes COVID-19. The second phase will involve a larger batch being produced in order to commence clinical trials in Australian hospitals.
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Don't 'buy the index': Investing in the time of the coronavirus
Stephen Bartholomeusz
Senior business columnist
May 6, 2020 — 11.58am
How do you invest in the time of the coronavirus? Probably not passively.
When Warren Buffett announced at Berkshire Hathaway’s annual meeting last weekend that he had dumped all his airline holdings -- $US6 billion ($9.5 billion) worth of stocks – it was, according to CNBC’s idiosyncratic sharemarket expert Jim Cramer, a wake-up call for investors in index funds.
Buffett once described the late Jack Bogle , who founded money manager Vanguard Group and pioneered index investing in the 1970s, as the person who had done the most for American investors.
"A lot of Wall Street is devoted to charging a lot for nothing," Buffett said. "He charged nothing to accomplish a huge amount."
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Damaged and scarred: Psychological effect of pandemic set to hold back economic recovery
By Mike Dolan
May 6, 2020 — 8.05am
The pandemic may finally be past its peak but markets are no longer frontloading a rapid economic recovery as the realisation sinks in that the exit from COVID-19 might be messy.
Amid all the government plans and timelines for a return to normality, there's a parallel rethink among investors about just how cautious consumers will remain beyond the lockdowns - even as restrictions on movement, travel and large gatherings ease.
In the parlance of those trying to predict likely rebound shapes, a hoped-for "V" appears to be morphing into a "tick", or the Nike "Swoosh", depending on how you depict a sudden collapse in output followed by only gradual, slow recovery.
Judging by the European Central Bank's latest survey of professional forecasters, the consensus in Europe appears to be heading towards a "tick" - a pattern described by the bank as "flat and elongated recovery" from the end of the second quarter that takes some time to get back to pre-pandemic levels.
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Coronavirus: March retail sales data sets new growth record
A spectacular stockpiling of groceries and supermarket essentials has led to the biggest ever monthly jump in retail sales.
Rising fear that the COVID-19 pandemic would restrict access to items such as toilet paper, rice and pasta led to panic buying and drove an 8.5 per cent jump in retail sales in March – the largest rise in the history of the Australian Bureau of Statistics data, and 14 times as large as the 0.6 per cent increase in February.
ABS director of quarterly economy wide surveys Ben James said there was “unprecedented demand in food retailing, household goods, and other retailing”.
Food sales surged 24 per cent, “other” retailing climbed 17 per cent and household goods sales jumped 9 per cent, the ABS data showed.
But it was a very different story for cafes, restaurants and takeaway food services, which suffered a 23 per cent plunge in sales through March as social distancing measures forced people to stay home and led the closure of many businesses.
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Sage of Omaha Warren Buffett doesn’t have the answers
It was one of those critical moments in Warren Buffett’s 4½-hour video show on the weekend, when the Sage of Omaha revealed what he really thought.
And it wasn’t optimistic.
Despite the rah rah about never betting against America (a standard Buffett line that can be heard at almost every annual meeting), it was clear that the 89-year-old billionaire was painfully aware that he and everyone else simply do not know what is going to happen with the unprecedented coronavirus pandemic that is sweeping the world.
After an excruciatingly long, rambling introduction of almost two hours, where the master salesman went from the Louisiana Purchase of 1803 to the US Civil War of 1861 to 1865 to the stockmarket crash of 1929 and the fact that it took until 1951 to get back to its highs, Buffett’s way of talking up the strengths of America, his real thoughts were more evident in the subsequent question and answer period where he was (thankfully for Berkshire Hathaway shareholders) much sharper.
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How COVID-19 created a nation of ASX punters
An enlightening report from ASIC into retail trading during the COVID-19 crisis suggests mums, dads and day traders were determined to catch falling knives.
May 6, 2020 – 11.47am
Should we blame Warren Buffett?
There’s a piece of folksy wisdom from the Oracle of Omaha for just about every situation, but many of them have at their heart a simple piece of advice: swim against the tide.
You know them all. Buy straws in winter. The market transfers wealth from the impatient to the patient. Or the ultimate motto of the contrarian investor: “Be fearful when others are greedy and be greedy only when others are fearful.”
Australia’s mum and dad investors have clearly heeded Buffett’s advice, according to a new report by the corporate watchdog, which examines trends in trading by retail investors during the early phase of the pandemic crisis, when markets were in free fall.
According to the Australian Securities and Investment Commission paper released on Wednesday, Australian retail investors traded more money, more frequently, as they tried to take profit from the market turmoil.
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Beware the second wave of COVID-19
The risk of a deadly resurgence of the coronavirus could change the way we live for years to come.
Laura Spinney
Updated May 7, 2020 – 9.25am, first published at 9.21am
On March 15, just before COVID-19 hit the Lariboisière Hospital in Paris, the head of its emergency service was calm. “My team is ready,” said Eric Revue.
That team has now been operating at full capacity for the past six weeks. It has lost 10 per cent of its members to sickness (none have died), those who remain are tired, and morale is flagging. In recent days the flow of patients has slowed and the team has been able to catch its breath.
Dr Revue is now worried about what will happen after May 11, the date Emmanuel Macron has set for the beginning of the end of lockdown in France. “My fear is that the non-COVID-19 patients who have stayed away until now will arrive in a worsened condition, just as we’re dealing with a resurgence of the epidemic,” he says.
It’s a fear shared by many doctors, and politicians too, as they try to find the sweet spot of exit strategies – a combination of measures that will resurrect the economy and liberate their citizens while sparing health systems from a second wave of COVID-19 they are ill-equipped to manage. “Lifting restrictions too quickly could lead to a deadly resurgence,” said World Health Organisation (WHO) director general Tedros Adhanom Ghebreyesus on April 10.
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Tens of thousands of university research jobs at risk from funding blow
By Fergus Hunter
May 7, 2020 — 12.00am
Tens of thousands of research positions at universities are in jeopardy because of the COVID-19 crisis, prompting the sector to call for boosted government funding to plug the hole left by lost international education revenue.
Universities have urged the federal government to step in after modelling found 38 per cent of salaries in research are at risk because of a reduction of $2.5 billion from high-fee-paying international students this year.
The findings from Curtin University's deputy vice-chancellor for research, Chris Moran, have shed light on the threat to the 79,000-strong research workforce at Australian universities, which includes 24,000 academic staff, 10,000 support roles and 45,000 postgraduate students.
Universities Australia chair and Curtin vice-chancellor Deborah Terry seized on the modelling to highlight the economic consequences of cuts to research, which has come to be heavily subsidised by international student revenue.
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Australian concern over US spreading unfounded claims about Wuhan lab
By Anthony Galloway and Eryk Bagshaw
May 7, 2020 — 5.00am
For weeks the Australian government had been growing concerned about the Trump administration’s promotion of the theory that experiments on bats at a Wuhan laboratory had unleashed COVID-19. This week that anxiety peaked.
Multiple diplomatic and political sources, who spoke on the condition of anonymity, told The Sydney Morning Herald and The Age the suggestions by our biggest ally that Chinese lab experiments on bats had unleashed the new coronavirus would undermine Australia’s calls to ban the sale of exotic live animals at wet markets around the world.
"We can’t repeat the mistakes of the past. The WMDs fiasco was not that long ago," one former security official said, referring to the incorrect intelligence claims of huge Iraqi weapon stockpiles that formed the basis for the Iraq War in 2003.
It is impossible to pinpoint the exact moment concerns within local security and intelligence circles morphed into genuine anxiety, but an April 14 article in The Washington Post is regarded by some as a turning point. The article quoted leaked diplomatic cables detailing how US officials had in March 2018 raised concerns about the Wuhan Institute of Virology "conducting risky studies on coronaviruses from bats". Shortly afterwards President Donald Trump began raising the "lab theory" during his press briefings.
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Sweden's economy benefits from relaxed approach to COVID-19
By Russell Lynch
May 6, 2020 — 10.16am
Sweden has reaped the benefits of keeping its economy out of lockdown after escaping the dramatic growth slumps suffered by European rivals.
The Scandinavian country has taken a far more relaxed approach to tackling the coronavirus than much of the West, keeping most schools, restaurants and businesses open and relying on a voluntary approach to social distancing.
Official figures show the country's economy shrank by just 0.3 per cent in the first three months of 2020, a far smaller decline than most forecasters and its central bank expected. The Riksbank had pencilled in a drop of between 0.8 per cent and 1.8 per cent.
The smaller scale of the fall contrasts with record slumps seen across the Eurozone over the quarter as governments imposed more stringent measures. France's economy tumbled 5.8 per cent, Italy's 4.7 per cent and Spain's by 5.2 per cent, while the eurozone's output overall sank by 3.8 per cent - the worst decline in its history. The figures are likely to be far worse in the second quarter as lockdowns grind on.
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Australia lacks vaccine-making capacity, Defence report warns
By Liam Mannix
May 6, 2020 — 6.44pm
Australia lacks the facilities and know-how to make its own pandemic vaccines, a report to government has warned, raising fears we may have to wait years for another country to supply us with a COVID-19 vaccine.
Dr Craig Rayner, the lead author of a report prepared for the Defence Department three years ago, said it should have been a wake-up call for Australia to boost its vaccine and drug development infrastructure before a pandemic broke out.
Dr Rayner’s report, commissioned by the Department of Defence’s Science and Technology agency, analysed Australia’s ability to develop "medical countermeasures" – vaccines and drugs – for threats including pandemics, radiation and chemical and bioweapons.
The report noted Australia had "limited" manufacturing facilities and an insufficient number of experts who could take a drug from discovery through to a finished product, and lacked national, co-ordinated leadership to turn good science into products.
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Coronavirus: Second wave may be a tsunami, we just don’t know
The US is in for a world of further hurt and misery from coronavirus. Many states are ending their lockdowns and relaxing social distancing before their infection rates have come down. This could well have major geo-strategic consequences.
No one knows what will happen. The more I talk to experts on the virus, the more I hear from them these words: “I don’t know.”
Our own uptick in new cases this week shows the virus is not finished with us either. When national leaders say their country has “passed the peak” of infections, they are expressing hope. At best, they have passed the peak of the first wave.
Everyone is trying to conceive likely scenarios. A group of scientists at the University of Minnesota has outlined three likely possibilities.
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Corporate Australia's temperature check leaves big questions
The 60 companies that presented at the Macquarie Australia conference were determined to show their resilience. But huge economic dislocation is coming.
May 8, 2020 – 10.00am
The Macquarie Australia conference this week brought together a relatively disparate group of 60 Australian companies, but it was remarkable how many used a very similar template in presenting to the 500-odd investors who tuned in to the virtual event.
Most presentations went something like this:
First, the CEO would explain how their company has changed its operations to meet the challenge of COVID-19, praising their team for moving to remote working with barely a hiccup. “It’s times like these that make you proud to be the CEO of an organisation,” Downer chief executive Grant Fenn said in a perfect example of the genre.
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Recovery will be slow, warns Wesfarmers chairman
May 8, 2020 – 12.15am
The chairman of one of Australia's biggest employers is cautious about the speed of the economic recovery given the likelihood that many companies will collapse and consumers will remain subdued in the aftermath of the COVID-19 epidemic.
Michael Chaney, chairman of Wesfarmers, which owns the Bunnings, Target and Kmart chains, said he expected weak consumer sentiment and high unemployment would cast a shadow over the economy for next two to three years.
"I think we're going to see the effects of [the COVID-19 crisis] for some years," Mr Chaney told AFR BOSS. "Many companies, many small companies, I fear won't come out of this.
"It's one thing to have your interest payments or repayments suspended for six months, but if the interest is being capitalised, companies [that are] finding it difficult anyway will find it even more difficult.
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Coronavirus Australia: Parliamentary Budget Office releases update
Welfare and social security costs in March surged by $6.5 billion compared to a year earlier, as total government expenses jumped $8.7bn, according to the Parliamentary Budget Office.
“This partly reflected the government’s initial economic response to the COVID-19 pandemic, which included expenses for eligible individuals recognised on March 31 even if the cash payments were made later,” the PBO report said.
The federal budget’s underlying cash balance over the financial year to March was -$22bn, compared to an expected -$12.5bn.
Commonwealth’s net debt at the end of March stood around $430bn, already around $37bn higher than the most recent forecast for June 30.
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Business needs reprieve from COVID-19 class actions
The virus could spark a surge in class action law suits as legal firms and litigation funders rake in easy profits.
May 7, 2020 – 5.45pm
Michael Clarke has plenty to worry about during the COVID-19 crisis given the importance of China and US markets to Treasury Wine Estates’ dwindling profitability. But he also has to worry about the prospect of at least three different class actions against the company.
Two of the lawsuits were filed last month by the two biggest class action law firms in Australia, Slater&Gordon and Maurice Blackburn. The next seems likely to come from the Rosen Law Firm in New York.
And why not? Australia, after all, has become about the most attractive country worldwide for class action lawsuits, largely thanks to the extremely lucrative returns available to law firms and litigation funders.
According to analysis by Freehills, 61 per cent of the class action compensation awarded in Australia last year went to litigation funders and lawyers, up from 41 per cent in 2016, leaving just under 40 per cent for the plaintiffs.
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Normality is at least a couple of years away
While the medical prognosis looks less alarming, the economic prospect is as grim as ever. The Reserve Bank has done what it can, now it's up to the government.
May 8, 2020 – 6.00pm
There is ongoing debate about whether Australia's recession will look like a V, W, L or U. But its profile is clearly not going to fit any simple alphabet shape.
Those sectors of the economy which had to close down were very substantial and we knew the initial hit would be huge. But the Reserve Bank was quick off the mark in responding to the crisis, with its policy initiatives in mid-March.
While the medical prognosis looks considerably less alarming than envisaged in the early epidemiological modelling, the economic prospect is as grim as ever.
No matter how effective the stimulus, the productive potential of the economy has been reduced, debt burdens will be higher, some businesses will not revive and precautionary behaviour will persist.
As restrictions are relaxed, there could be a reasonably rapid return towards normality. But the opening-up process was always going to be tentative and experimental.
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'Three decisions and a two-point plan': How Australia got on top of COVID-19
Political and international editor for The Sydney Morning Herald
May 9, 2020 — 12.01am
It got really serious for Greg Hunt while he was at the cricket. It was a Saturday morning, February 1, while Australia's Health Minister was watching his 10-year-old son play that he got the message.
In between phone calls and text messages, Hunt was cheering his boy on as he walked laps around the Balnarring cricket oval on his home turf of Victoria's Mornington Peninsula.
"We now have sustained human-to-human transmission outside Wuhan," read the message from Australia's Chief Medical Officer, Brendan Murphy, as Hunt recalls it. "I think we are going to have to close the border to China."
It's a morning that Hunt says he remembers clearly. The government was already on high alert. It had been 12 days since Murphy had informed Hunt he was invoking the Biosecurity Act to list the novel coronavirus as a disease of pandemic potential.
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The hidden costs of the pandemic
Senior economics writer
May 9, 2020 — 12.10am
Welcome to the real-time recession. Advances in data collection and analysis means we’re awash with information about the coronavirus crisis.
A flurry of opinion polls have kept us up to date on what people have been thinking and feeling during the pandemic shutdown, while real-time spending reports have alerted us to the consumer reaction.
Shocking new economic modelling has warned unemployment could reach more than 20 per cent due to the coronavirus.
We’ve learned that wealthier neighbourhoods have cut back on spending more than lower income ones, how families have been tightening their belts by switching to discount brands and that food delivery, home improvement and pet care have boomed during the lockdown. We're also spending more on alcohol and online gambling.
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Economic managers bank on us being as smart as the average bear
Economics Editor
May 9, 2020 — 12.04am
It’s a lovely, comforting way to think about our economic problem. To beat the virus, we’ve had to put the economy into hibernation, but now it’s time for the bear to come out of its cave and get back to normal living. And it seems that’s just what Reserve Bank governor Dr Philip Lowe expects to happen.
The "baseline scenario" he outlined this week sees real gross domestic product falling by about 10 per cent over the first half of this year but then, it seems, growing by roughly 4 per cent in the second half, so that real GDP in December is just 6 per cent lower than it was in the December quarter last year. Then it “bounces back” to grow by 6 per cent over the course of next year.
Not bad, eh? We go down by 6 per cent this year, but then back up by 6 per cent next year. It can’t be quite so good as that sounds, however, because the rate of unemployment – which is expected roughly to have doubled to 10 per cent by the end of next month, is also expected to still be above 7 per cent at the end of next year.
These figures tell us that returning to positive growth in GDP is easier than returning to low unemployment. Unemployment goes up a lot faster than it comes down. That’s partly because the rate at which GDP grows isn’t as important as the level it attains. It’s the level that determines how many jobs there’ll be.
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Coronavirus: Economy lurches into unknown territory
Even if 850,000 Australians are back in work by July, as Scott Morrison signalled on Friday when he laid out the three-stage plan to reopen the economy, the social, economic and political effects will be long-lasting. Not in a century have we as a nation become so poor so quickly.
The impact of COVID-19, and more particularly the responses to it, dwarf the impact of all the recessions since the Depression of the 1930s, which took its toll gradually. During World War II, economic activity rose 26 per cent in the six years to 1946 and the jobless rate fell to 1 per cent.
In six weeks almost one million Australians have lost their jobs and the economy has shrunk about 10 per cent — the fastest rate ever. Big dollops of foreign exchange earnings — mainly from tourism and education — have evaporated, and immigration, the underpinning of economic growth for almost a generation, is set to slow to a trickle, potentially for years.
The coronavirus crisis will divide history just as September 11, 2001 did.
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How to beat the next pandemic
The human race must be battle-ready if we’re to beat future pandemics. Now, at last, the call to arms has begun.
By Jennifer Kahn
· From The Weekend Australian Magazine
May 9, 2020
One morning in February 2018, a group of 30 microbiologists, zoologists and public-health experts from around the world met at the headquarters of the World Health Organisation in Geneva. The group had been established by the WHO in 2015 to create a priority list of dangerous viruses – specifically, those for which no vaccines or drugs were already in development. The consensus among those in the room was that as populations and global travel continued to grow, and development increasingly pushed into wild areas, it was almost inevitable that once-containable local outbreaks of diseases such as SARS or ebola could become global disasters.
“The meeting was in a big room, with all the tables arranged around the edge, facing each other,” one of the group’s members, Peter Daszak, recalls. “It was a very formal process. Each person was asked to present the case for including a particular disease on the list of top threats. And everything you said was being taken down, and checked factually, and recorded.”
Daszak, president of the US pandemic prevention group EcoHealth Alliance and chairman of the Forum on Microbial Threats at the National Academies of Sciences, Engineering and Medicine, had been given the task of presenting on SARS, a coronavirus that killed roughly 800 people after it emerged in 2002. “We’d done a lot of research on coronaviruses, so we knew they were a clear and present danger,’’ he tells me. “High mortality, no drugs or vaccines in the pipeline, with new variants that could still be emerging.’’
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ICU doctors say risk of hospitals being overrun has passed
By Chip Le Grand
May 9, 2020 — 11.30pm
Intensive care doctors say Australian hospitals can safely cope with any surge of coronavirus cases caused by the reopening of the economy and a winding back of social restrictions.
Australian and New Zealand Intensive Care Society secretary Dr Mark Nicholls said though the risk of “second wave” contagion was real, people should have confidence in the capacity of the health system to respond to any further outbreaks.
“My personal opinion is that we need to open up the economy, people need to start getting back to work, and we have now seen that the systems we have put in place work,’’ said Dr Nicholls, a senior intensivist at Sydney’s St Vincent’s Hospital.
“What we have seen is that we are ready for it. The system has been tested and we can ramp up if we get another surge in patients and continue to deliver really good care.”
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Coronavirus: Pandemic shows up the gaps in military defences
In a world where big fish eat the small fish, and the small fish eat shrimps, Singapore must become a poison shrimp.
— Lee Kuan Yew
The coronavirus has infected Australia’s strategic environment. It transforms our circumstances, multiplies and intensifies threats, and shatters any strategic assumption that could justify complacency, or even business as usual.
The Morrison government should respond to this new strategic urgency. Naturally, it has to get through the health crisis first. Within our defence establishment, serious work is under way on what the virus means for us and how it has accelerated every difficult, challenging and potentially deadly strategic trend we face.
Here are eight ways the virus has transformed our strategic outlook:
1.COVID-19 has smashed up altogether the idea of strategic warning time. Any security crisis today is come-as-you-are. You don’t get to wait for your ball gown to be made next year and fitted the year after. You have to cope with what you have. And we don’t have enough.
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Coronavirus infecting people ‘weeks earlier than thought’
Scientists have begun narrowing down how the coronavirus is spreading, and also pinpointing when it first began transmission around the world — and it’s earlier than first thought.
University College London’s Genetics Institute have screened the genomes of more than 7500 viruses from infected patients around the world.
“Phylogenetic estimates support that the COVID-2 pandemic started sometime around October 6, 2019 to December 11, 2019, which corresponds to the time of the host jump into humans,” lead researcher Francois Balloux said.
Researchers say people were getting infected around the world at least weeks, if not months, before the first reported Chinese cases in January and February. The genetic code of the virus was first released by Chinese researchers on January 5.
Prof Balloux’s study also found almost 200 recurrent genetic mutations of the new coronavirus — SARS-CoV-2 — but dispelled suggestions there were three different strains of the virus around the world.
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‘Finally, a virus got me.’ Scientist who fought Ebola and HIV reflects on facing death from COVID-19
Virologist Peter Piot, director of the London School of Hygiene & Tropical Medicine, fell ill with COVID-19 in mid-March. He spent a week in a hospital and has been recovering at his home in London since. Climbing a flight of stairs still leaves him breathless.
Piot, who grew up in Belgium, was one of the discoverers of the Ebola virus in 1976 and spent his career fighting infectious diseases. He headed the Joint United Nations Programme on HIV/AIDS between 1995 and 2008 and is currently a coronavirus adviser to European Commission President Ursula von der Leyen. But his personal confrontation with the new coronavirus was a life-changing experience, Piot says.
This interview took place on 2 May. Piot’s answers have been edited and translated from Dutch:
“On 19 March, I suddenly had a high fever and a stabbing headache. My skull and hair felt very painful, which was bizarre. I didn’t have a cough at the time, but still, my first reflex was: I have it. I kept working—I’m a workaholic—but from home. We put a lot of effort into teleworking at the London School of Hygiene & Tropical Medicine last year, so that we didn’t have to travel as much. That investment, made in the context of the fight against global warming, is now very useful, of course.
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Royal Commissions And The Like.
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There are no entries in this category.
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National Budget Issues.
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Coronavirus crash: the poetic lessons of history
There was an interesting, and quite suggestive 32-year double last week, both of them on Thursday as it happens: first the Reserve Bank revealed that the increase in business credit in March was the largest since 1988, and then the end of trading that day saw April record the biggest monthly rise in the stockmarket since 1988.
The All Ordinaries index rose 9.5 per cent in April. The last time it did that was March 1988 – up 11.2 per cent, continuing the recovery from the October 1987 crash, which had bottomed on February 10, at 1,205, which was near enough to 50 per cent below the September 21 peak.
Business credit increased 2.9 per cent in March this year. The last time that happened was January 1988, when it rose 3.7 per cent, on its way to a stunning 27.7 per cent increase for the year – more than twice the 12.8 per cent rise in the stockmarket that same year.
Those were heady days. Mark Twain is supposed to have said “history doesn’t repeat but it often rhymes”, but these times don’t even seem to be rhyming with 1988, let alone repeating.
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First the Australian economy needs CPR. We’ll worry about reform later
Ross Gittins
Economics Editor
May 4, 2020 — 12.15am
I can’t take seriously all those people saying we mustn’t waste a crisis, but seize this great opportunity to introduce sweeping economic reform. It’s like telling a baby who hasn’t yet learnt to walk it should start training for the Olympics.
It’s true, of course, that we won’t get back to economic life as we used to know it – that is, knew it before the global financial crisis, more than a decade ago – until we get back to reasonably strong annual improvement in the productivity of labour.
But the plain fact is, you’ve got to have a functioning economy before you can worry about how fast its productivity is improving. So there’ll be a time to debate which policies would or wouldn't do most to enhance productivity, but we have more pressing matters to attend to.
Some in the don’t-waste-the-crisis party can be forgiven because they’re under 50 and have no memory of what happens in recessions. But as my colleague Shane Wright has said, most of them are "the usual suspects, falling back on their usual agendas".
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6:00am, May 5, 2020 Updated: 8:42pm, May 4
What falling immigration means for our economic recovery
No wonder the government says it is looking for new post-COVID economic drivers – it quietly left its biggest one smashed in a ditch on Friday.
Fridays are the traditional day for “taking out the garbage”, when governments drop bad news, hoping the impact will be softened by the weekend.
And so it was last week when the government partially admitted the population growth the country has been relying on had been whacked.
The immediate news was that net overseas migration is expected to fall by 30 per cent this financial year before plunging off the cliff in 2020-21, down 85 per cent
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Restrictions costing economy $4b a week
May 4, 2020 – 10.30pm
Treasurer Josh Frydenberg will kickstart the push to reopen the economy today warning it will lose $4 billion for every week the coronavirus restrictions stay in place, and that it is already on track to shrink by 10 per cent, or $50 billion, in the three months to the end of June.
In a major speech aimed at getting people back to work, Mr Frydenberg will say the harsh economic restrictions imposed to contain the coronavirus have killed jobs, productivity and consumption.
"We must get people back into jobs and back into work,'' Mr Frydenberg will tell the National Press Club.
The $4 billion hit to economic activity for each extra week the restrictions remain in place "is equivalent to what around 4 million Australians on the median wage would earn in a week''.
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Card data shows spending has hit bottom
May 5, 2020 – 9.33am
Credit and debit card spending data from the Commonwealth Bank and ANZ shows that a low point in spending was reached in the fortnight to May 1 before the coronavirus restrictions started to ease.
While spending is down 10 per cent in that period compared to the same period last year, it's an improvement on the mid‑April spending which was down by almost 20 per cent on the same level a year ago.
"It looks to be the case that households have stepped up their rate of expenditure over the second half of April compared with the first half of the month," CBA economist Gareth Aird said.
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Decade of debt sets mammoth reform task for Frydenberg
May 5, 2020 – 12.00am
Economists are forecasting the federal government will have $850 billion of bonds on issue and a net debt of 27 per cent of GDP by 2023.
Writing in The Australian Financial Review, Industry Super Australia's chief economist Stephen Anthony has projected that without reform, the federal government could have deficits for a decade or more.
They include a $77 billion deficit this financial year (4 cent of GDP), a deficit of $142 billion (7.3 per cent of GDP) next financial year and deficits in excess of $16 billion in each year of the forward estimates.
"Over the outlook our deficits total around $313 billion implying the Government's outstanding bond issuance will jump to around $850 billion by mid-2024, from around $550 billion today.
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If today was budget day, the picture wouldn't be pretty
A check-up on how the federal budget is tracking reveals a spiralling deficit and debt, and government borrowing could reach 27 per cent of GDP in four years.
May 5, 2020 – 12.00am
Just eight weeks ago, Treasurer Josh Frydenberg was within reach of delivering a cash surplus for 2019-20 (the first surplus since 2007-08) and reconfirming modest surpluses over the forward years.
Now eight weeks later, the COVID-19 pandemic has had the budget deferred to October. The government has so far committed to fiscal stimulus totalling $193 billion (10 per cent of GDP) from April through to September 2020.
The plan is to prop up affected households and businesses while placing the economy in a deep freeze – the "hiber-cession" – to keep people safe during the medical emergency and still avert an economic catastrophe.
The Morrison government and the national cabinet (and Reserve Bank) are to be commended for their policy agility and coordination to bring out effective stimulus to ward off the liquidity crisis that was looming in March and April for the retrenched workers and small businesses, as well as on financial markets.
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Restrictions costing the country $4 billion a week: Frydenberg
By Shane Wright
May 4, 2020 — 10.30pm
The restrictions aimed at stopping the spread of coronavirus are costing Australia $4 billion a week, with Treasurer Josh Frydenberg revealing the economy is likely to shrink by 10 per cent in the June quarter.
In analysis that puts pressure on the national cabinet to start loosening economy-depressing restrictions at its Friday meeting, the Treasurer will use a speech on Tuesday to outline the economic damage already caused by the pandemic and measures to bring it to a halt.
Several states and territories have already started to loosen restrictions put in place in late March and Friday's national cabinet meeting is expected to map out a more extensive series of eased measures. This will include a presentation on "COVID Safe Workplaces" to get Australians back into the office and the economy moving again.
Mr Frydenberg will tell the National Press Club that Treasury analysis shows for every extra week current restrictions remain in place, the economy will take a $4 billion hit from a combination of reduced workforce participation, production and consumption.
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Statement by Philip Lowe, Governor: Monetary Policy Decision
Number 2020-13
Date 5 May 2020
At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
The global economy is experiencing a severe downturn as countries seek to contain the coronavirus. Many people have lost their jobs and a sharp rise in unemployment is occurring. At the same time, the containment measures have reduced infection rates in a number of countries. If this continues, a recovery in the global economy will start later this year, supported by both the large fiscal packages and the significant easing in monetary policies.
Globally, financial markets are working more effectively than they were a month ago, although conditions have not completely normalised. This improvement reflects both the decline in infection rates and the substantial measures undertaken by central banks and fiscal authorities. Credit markets have progressively opened to more firms and long-term bond rates remain at historically low levels.
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Hard lessons on how recessions work and why we hate them so much
Ross Gittins
Economics Editor
May 6, 2020 — 12.01am
Forgive me for boasting about how old I am, but this coronacession – aka the Great Lockdown – will be the fourth severe recession of my career as an economic journalist. That makes recessions my special subject, though I’ve not had much call to talk about them for almost 30 years.
I was too young to remember much of Bob Menzies’ Credit Squeeze, which came within a whisker of tossing him out of office in 1961. But I was established in journalism before I saw the recession of the mid-1970s add the last nail to the coffin of the Whitlam government.
Treasurer Josh Frydenberg has addressed the National Press Club speaking about Australia's path out of the COVID-19 crisis.
Malcolm Fraser’s prime ministership was cut short by the recession of the early 1980s. Bob Hawke’s successor, Paul Keating, should have been dispensed with at the 1993 election after the recession of the early 1990s, but was saved by our inordinate fear of Dr John Hewson’s proposed goods and services tax. By the next election in 1996, however, voters were on their verandahs with baseball bats waiting for Keating.
So, lesson No. 1: governments that preside over recessions usually get the blame for them. Lesson No. 2: in Australia, recessions happen roughly every seven years – or so I imagined at the time.
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Don't try this at home: ASIC's warning for amateur sharemarket punters
Elizabeth Knight
Business columnist
May 6, 2020 — 2.46pm
A worrying number of Australians have turned to day trading the sharemarket during COVID-19. The trouble is, they aren’t good at it.
And they are losing money.
According to research from the Australian Securities and Investments Commission there has been a big increase in the number of retail investors trading the market during the coronavirus pandemic. They are investing more money and churning stocks way more frequently.
Average daily turnover by retail brokers increased from $1.6 billion in a regular period to $3.3 billion between the end of February and the start of May. And each day during this COVID-19 period a staggering 4,675 new accounts were registered - up by a factor of 3.4 times. At the same time there was a large spike in dormant accounts.
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Banks defer $200bn in loans under COVID-19 assistance schemes
More than $20bn in loans have been deferred by Australian banks in just the last week under coronavirus assistance schemes, bringing total deferred loans to at least $200bn, according to the Australian Banking Association.
New numbers out today show loans for 100,000 Australians, including 50,000 home loans, have been deferred in the last week alone.
Australian banks have now deferred at least 643,000 loans and nearly 392,000 home loans during the COVID-19 pandemic.
ABA chief executive Anna Bligh said the new data showed the extent to which banks were assisting customers in bridging the crisis.
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RBA: 8pc contraction by June, then fast recovery likely
May 8, 2020 – 11.42am
A crash in consumption and business investment will result in the Australian economy contracting 8 per cent by June, the Reserve Bank of Australia says.
The economy will then recover enough to be down 6 per cent by the end of the year, according to the latest central bank forecasts released on Friday.
The RBA modelled three main scenarios for the economy depending on different levels and timing of COVID-19 related restrictions, which the national cabinet announced as a three stage plan on Friday.
After the release of the statement, the Prime Minister Mr Morrison announced his intention to lift restrictions by July.
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How the economy will look by July
Coronavirus Australia: How the economy will look by July
May 8, 2020 – 6.30pm
About 850,000 people are forecast to be back in work under a three-stage plan agreed to by the states and the Commonwealth to reopen much of the economy by July following the COVID-19 lockdown.
Urged by Prime Minister Scott Morrison to not take a backwards step, each of the states will move through the three stages at their own pace but agreed on Friday to reach a common endpoint in July. This would be when gatherings of up to 100 people, almost all businesses trading and interstate travel will be allowed.
There is no indication when international travel will be permitted, but stage three could see Australia's borders with New Zealand open by July. Foreign university students may be allowed in under strict quarantine provisions. These exceptions will be subject to further development.
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Economic snapback 'unlikely' as deal flow slows: Macquarie
Michael Roddan Senior companies reporter
Updated May 8, 2020 – 5.03pm, first published at 9.21am
A quick economic snapback is very "unlikely" and there is a decent chance it will be many years before Australian business activity recovers to pre-pandemic levels, according to Macquarie Group chief executive Shemara Wikramanayake.
Unveiling an 8.4 per cent drop in full-year profit to $2.7 billion and a final dividend reduced by half on Friday, Ms Wikramanayake said the company had already learned lessons from the "latest black swan" event and warned there was still a great deal of uncertainty about the economic and financial outlook.
This includes a slowing down of large asset sales and financing deals. "We do think activity level will be subdued because people won't be able to get around. There’ll be implications," Ms Wikramanayake said.
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'Temporary lifeline': Hundreds of thousands face pre-Christmas income hit
By Shane Wright
May 8, 2020 — 11.00pm
Hundreds of thousands of unemployed Australians face a huge cut in their incomes just before Christmas as the Morrison government prepares to wind back income support despite warnings from the Reserve Bank the economy will not return to its pre-coronavirus size until 2022.
Prime Minister Scott Morrison on Friday stood by the government's plans to phase out the coronavirus supplement for JobSeeker recipients and the JobKeeper program from mid-September, saying they came at a significant cost that would have to be borne by future generations.
Prime Minister Scott Morrison has outlined a rough three-stage plan to lifting coronavirus restrictions in Australia.
The Reserve Bank of Australia, releasing its first major economic forecasts since the advent of the coronavirus pandemic, expects unemployment to reach 10 per cent in the June quarter and recede only slightly to 9 per cent by the end of the year.
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Baby-bump slump pokes hole in Treasury forecasts
By David Crowe and Shane Wright
May 10, 2020 — 12.00am
Australia will suffer a population slowdown as the coronavirus crisis discourages women from having children, leading to a slump in the birth rate that will drag down the economy.
New figures show the nation's fertility rate will fall short of the Morrison government's ambitious budget forecasts amid an escalating political row over a steep dive in migration during the crisis.
The number of births was already falling in NSW, Victoria and Queensland before the pandemic forced millions of Australians out of work, leading experts to forecast bigger declines in the recession.
Births fell by 2 per cent to 91,376 in NSW, by 0.2 per cent to 79,597 in Victoria and by 0.1 per cent to 62,184 in Queensland last calendar year.
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Health Issues.
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Coronavirus: Critically ill asymptomatic kids alarm doctors in Britain
A cluster of children who had coronavirus but were asymptomatic has alarmed doctors after they became critically ill with symptoms similar to toxic shock syndrome or Kawasaki disease.
A study from Evelina London Children’s Hospital and reported in the Lancet has raised concerns that children may not escape the impact of coronavirus as easily as initially believed.
The alarm was raised last month when a cluster of eight critically ill children, aged four to 14, suddenly presented at the hospital. Since then more than 20 children have been seen at the hospital with similar symptoms. The hospital normally sees about two a week.
Doctors say most of the children had not tested positive to coronavirus but many of them had coronavirus antibodies, indicating they were asymptomatic.
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International Issues.
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'Biggest failure in a generation': Where did Britain go wrong?
Unlike Italy, the United Kingdom had time to prepare for the coronavirus tsunami. But as the death toll climbs, critics say Britain's response has suffered from a series of deadly mistakes and miscalculations.
May 3, 2020
Health Secretary Matt Hancock was midway through a radio interview when the phone call came through live to air. On the line was Intisar Chowdhury, whose father Abdul had made a prescient public plea to Boris Johnson in late March.
Through a Facebook post, the 53-year-old consultant urologist for a London hospital had urged the Prime Minister to make sure every health worker in Britain would be given protective equipment during the coronavirus pandemic. Abdul Mabud Chowdhury died just three weeks later, after contracting the disease.
In his phone call, the doctor's grieving son asked for answers and an apology: "The public is not expecting the government to handle this perfectly," he told Hancock. "We just want you to openly acknowledge that there have been mistakes in handling the virus, especially to me and to so many families that have really lost loved ones as a result of this virus and probably as a result of the government not handling it seriously enough."
Abdul Mabud Chowdhury, a consultant urologist at Homerton Hospital, died weeks after pleading with the government to provide PPE for healthcare workers.
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Warren Buffett is not making deals - and we should be worried
By Andrew Ross Sorkin
May 4, 2020 — 10.30am
You could always count on the folksy and cheery optimism of Warren Buffett.
But if you listened closely to Buffett over the weekend during Berkshire Hathaway's shareholders' meeting — his annual "Woodstock for Capitalists" was conducted virtually because of the coronavirus pandemic — his words often betrayed a deep sense of concern about the immediate future. That should be a warning to all investors and policymakers.
While many of the headlines about the meeting were about Buffett's positive aphorisms —"Nothing can basically stop America,""You can bet on America"— underneath those long-term proclamations was a decidedly different message.
Every year for the last decade, I've sat onstage at this meeting in Omaha with Buffett and his best friend, Charlie Munger, as one of several journalists asking him questions sent in by the public. His positivity, even during difficult economic moments, always radiated with a clear sense of certainty. After all, he is known as the Oracle of Omaha.
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Trump administration projecting 3K daily coronavirus deaths by June
The Trump administration is projecting that the United States could see up to 3,000 deaths per day from the coronavirus by June 1, a person familiar with internal documents confirmed to The Hill on Monday.
Data and modeling from the Centers for Disease Control and Prevention (CDC) show that the federal government is expecting the number of cases and deaths associated with the pandemic to continue mounting, even as President Trump and other officials push for states to lift restrictions meant to slow the spread of the virus in favor of reopening businesses.
The New York Times, which was the first to report on the projections, posted the documents, which show the CDC and Federal Emergency Management Agency forecast a steady increase in the number of new cases per day.
The projections show the U.S. reaching 200,000 new cases daily by June 1 with a daily death toll of roughly 3,000. The number of daily cases peaked in late April at just over 30,000. The current daily death toll varies, but typically falls between 1,500 and 2,000.
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Podcast: Is a second Great Depression coming?
May 04, 2020
Most of us are familiar with recession, and experienced the major economic impact of one from 2008-2010. It turns out, the definition of a "depression" is harder to articulate, even for economists, because the US hasn't had one since the 1930s. But as unemployment rises and lockdowns threaten the existence of businesses here and around the world, it's time to ask the question: Is another depression a possibility, and what would that look like today? On the latest episode of GZERO World, Ian Bremmer poses this question to leading economic historian and author Adam Tooze. The two discuss the strength of the US and global economies before and during the COVID-19 pandemic, and realistic timeframes for when the financial outlook will improve.
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Trump administration models predict rising death, infection rates
The New York Times
Updated May 5, 2020 – 8.04am, first published at 3.14am
As President Donald Trump presses for states to reopen their economies, his administration is privately projecting a steady rise in the number of cases and deaths from the coronavirus over the next several weeks, reaching about 3000 daily deaths on June 1, according to an internal document obtained by The New York Times, nearly double from the current level of about 1750.
The projections, based on modelling by the Centres for Disease Control and Prevention and pulled together in chart form by the Federal Emergency Management Agency, forecast about 200,000 new cases each day by the end of the month, up from about 25,000 cases now.
The numbers underscore a sobering reality: While the United States has been hunkered down for the past seven weeks, not much has changed. And the reopening to the economy will make matters worse.
"There remains a large number of counties whose burden continues to grow," the CDC warned.
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Leaked Trump administration figures project 3000 COVID-19 deaths a day in the US
By Matthew Knott
May 5, 2020 — 3.58am
Washington: The Trump administration is privately projecting that up to 3000 people will soon die each day from COVID-19 - a significant increase on current figures - even as the US President urges states to quickly re-open their economies.
The leaked projections from the Centres for Disease Control and Prevention (CDC) emerged as Donald Trump acknowledged that the total US death toll could reach 100,000 - far higher than the estimates he has cited in recent weeks.
The president once again raised his forecast for how many Americans may die from COVID-19 as the toll continues to climb
Just hours later, the University of Washington experts behind the country's most-watched coronavirus model announced a dramatic increase in their projected US COVID-19 death toll. The Institute of Health Metrics and Evaluation model now projects that almost 135,000 people will die from the coronavirus in the US - up from its previous estimate of 72,433 deaths.
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Australia must get better at picking its fights with China
Power is still the essence of international relations. That is the reality Canberra must learn to manage in the new Asia.
May 5, 2020 – 12.02pm
Everyone loves a David and Goliath story. That is why we have all been cheering plucky little Canberra for standing up to the big bullies in Beijing. But how does the story end? In the Bible, David strides triumphant over the humbled Goliath. In reality it is much more likely that David gets a sharp lesson in the realities of raw power.
But it is too late to back out now. China’s crude threats of economic retaliation have made it impossible for the Morrison government to abandon its proposal for an independent international enquiry. That would make it look pathetic.
Nonetheless, we need to ask how Australia found itself in a stoush with China that we cannot abandon and cannot win, and try to learn some lessons for the future. Because we are going to face this kind of problem again, often, in the new Asia of the 21st Century.
The first lesson is to not needlessly antagonise China, especially when we need their co-operation. However good it may make us feel, Australia’s bold defiance of Beijing has been spectacularly counterproductive.
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The US and China’s dangerous blame game will end in tears
By agreeing to an international, independent inquiry into the coronavirus outbreak, China could kill off the conspiracy theories while calming global tensions.
May 5, 2020 – 9.56am
Future historians might record that the COVID-19 pandemic marked the start of a new cold war between China and the US.
Even before the coronavirus emerged, tensions between Washington and Beijing were rising. China had challenged American power in the Pacific, by building a chain of military bases across the South China Sea. In the US, the Trump administration had initiated a trade war.
Now as the pandemic wreaks havoc on the world economy, with more than one-quarter of the world’s fatalities in America, Donald Trump is increasingly turning on China.
The US President has endorsed the idea that the coronavirus originated in the Institute of Virology in Wuhan. He has also speculated that it might have been deliberately manufactured – an idea his own intelligence agencies have explicitly repudiated.
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US toll to double, Trump says it's 'time to go back to work'
Updated May 6, 2020 – 7.53am, first published at 5.30am
Washington| Donald Trump has put Americans on notice: hiding from the pandemic is no longer an option.
"We did everything right, but now it's time to go back to work," Mr Trump said before departing the White House to tour a mask-making factory in Arizona on Tuesday (Wednesday AEST), hours after an influential coronavirus tracker watched closely by White House officials almost doubled the likely total death toll.
"If we did this a different way," Mr Trump said, referring to social distancing measures in place since mid-March, "we would have lost more - much more than two million people."
In excess of 134,000 people are now expected to have died of COVID-19 by August 4, up from 72,000 anticipated just 24 hours earlier, with experts warning that new outbreaks could push that number even higher as the economy re-opens.
Mr Trump's comments are the first that so bluntly spell out the raw choice facing America as it confronts the crippling cost of maintaining the vast economic and fiscal cost of the nation's containment strategy even as infections and deaths continue to surge after almost two months of lockdowns.
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'Exit stage left': White House to wind down coronavirus taskforce
By Matthew Knott
Updated May 6, 2020 — 12.09pmfirst published at 7.14am
Washington: The Trump administration is preparing to wind down its coronavirus taskforce within weeks, even as the US recorded one of its highest daily death tolls since the pandemic began.
Vice-President Mike Pence, who has been chairing the taskforce, said the White House believed the period around Memorial Day on May 25 would be a good time to transition away from it.
"We're having conversations about that and about what the proper time is for the taskforce to complete its work and for the ongoing efforts to take place on an agency-by-agency level," Pence told reporters.
The White House has already stopped holding its daily coronavirus briefings and the taskforce - which includes Doctors Anthony Fauci and Deborah Birx - has been meeting less frequently over recent days.
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World is facing a rare 'inflationary depression,' says economic historian
By Alaa Shahine
May 7, 2020 — 5.37am
The world economy could face a unique "inflationary depression" as it emerges from lockdowns, with government spending propping up demand even as unemployment soars, according to economic historian Robert Skidelsky.
What makes the economic shock from the coronavirus different to the Great Depression, he said, is that shuttering industries to control the disease has yet to cause a plunge in purchasing power - largely because governments have stepped in to subsidise wages.
In Europe alone, that support has so far saved about 40 million jobs. It's also going to push prices up, according to Skidelsky, author of a three-part biography of the British economist John Maynard Keynes.
"As we come out of the lockdown, there is going to be a depression and inflation at the same time," he told Bloomberg TV's Tom Keene and Francine Lacqua in an interview. "It's very, very unusual."
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'A recession of historic proportions': Europe's economic hit will be long-lasting
By Bevan Shields
May 7, 2020 — 5.43am
London: Europe will experience a "recession of historic proportions" that dwarfs the global financial crisis, according to new forecasts which warn of a collapse in investment, surge in government debt and spike in unemployment that leaves one in five people jobless in some countries.
European Commission economy commissioner Paolo Gentiloni said the wildly uneven distribution of the coronavirus-induced damage across the continent posed a threat to the European Union's single market as well as the eurozone, its monetary union.
We've heard all about the impact the coronavirus will have on the national economy, but now figures have been released revealing which local government economies will be hardest hit.
EU officials are designing a multi-trillion dollar 'recovery fund' that will seek to stamp out any rise in anti-euro sentiment and prevent major economies like Italy from collapsing under huge levels of debt. It comes after a plan by hard-hit southern countries to lower borrowing costs by pooling debt was rejected.
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Europe is facing its worst recession ever. Watch out, world.
By Matina Stevis-Gridneff and Jack Ewing
May 7, 2020 — 11.47am
The good news for Europe is that the worst of the pandemic is beginning to ease. This week deaths in Italy hit a nearly two-month low. And German chancellor Angela Merkel announced that schools, day care centres and restaurants would reopen in the next few days.
But the relief could be short-lived.
The European Commission released projections on Wednesday that Europe's economy will shrink by 7.4 per cent this year. A top official told residents of the European Union, first formed in the aftermath of World War II, to expect the "deepest economic recession in its history."
To put this figure in perspective, the 27-nation bloc's economy had been predicted to grow by 1.2 per cent this year. In 2009, at the back of the global financial crisis, it shrank by 4.5 per cent.
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How to escape the trap of excessive debt
Ever-rising household and government debt will not stabilise the world economy forever. We will have to adopt more radical alternatives.
May 7, 2020 – 11.09am
“It is utterly impossible . . . for the rich to save as much as they have been trying to save, and save anything that is worth saving.” Marriner Eccles, Congressional testimony 1933.
Debt creates fragility. The question is how to escape from the trap. To answer it, we need to analyse why today’s global economy has become so debt-dependent.
That did not happen because of the idle whims of central bankers, as many suppose. It happened because of an excessive desire to save relative to investment opportunities. This has suppressed real interest rates and made demand far too reliant on debt.
Two recent papers illuminate both the forces driving this rise in leverage and its consequences. One, directly related to the views of Eccles, who chaired the US Federal Reserve from 1934 to 1948, is on The Saving Glut of the Rich and the Rise in Household Debt. The other, on Indebted Demand, explains how debt overhangs weaken demand and lower interest rates, in a feedback loop.
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US dumps the CDC's guide to reopening country
May 8, 2020 – 12.39am
Gainesville, Florida | The Trump administration has shelved a document created by the nation's top disease investigators with step-by-step advice to local authorities on how and when to reopen restaurants and other public places during the still-raging coronavirus outbreak.
The 17-page report by a Centres for Disease Control and Prevention team, titled "Guidance for Implementing the Opening Up America Again Framework," was researched and written to help faith leaders, business owners, educators and state and local officials as they begin to reopen.
It was supposed to be published last Friday, but agency scientists were told the guidance "would never see the light of day," according to a CDC official. The official was not authorised to talk to reporters and spoke to The Associated Press on the condition of anonymity.
The AP obtained a copy from a second federal official who was not authorised to release it. The guidance was described in AP stories last week, prior to the White House decision to shelve it.
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British economy hurtles towards largest crash in three centuries
By Louis Ashworth
May 8, 2020 — 10.44am
Britain's economy is heading for the worst annual contraction of the modern era, and one of the worst drops in history, the Bank of England estimates.
Threadneedle Street's latest report estimates the UK's gross domestic product will shrink 14 per cent this year, with a 25 per cent hit in the second quarter of 2020.
The predictions show the devastating impact of COVID-19, which has led to a virtual shutdown of vast swathes of the economy. Here's how those estimates measure up with centuries of British economic history.
The Bank of England's best estimates for historic GDP growth show such a drop would leave 2020 among the worst years in English or British economic history - with the 14th biggest fall in GDP since 1270 (the earliest year for which there is an estimate).
Still, it's somewhat short of the plunge in 1629, the first year of King Charles I's period of "personal rule" following the dissolution of Parliament.
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Stocks surge on one of the unhappiest days in US economic history
Thomas Heath
May 9, 2020 – 6.47am
The worst unemployment report in American history screamed across computer and television screens Friday morning in the US, announcing that a breathtaking 20.5 million Americans lost their jobs in April.
The next 60 seconds saw the Dow Jones industrial average jump, a 300-point pop that extended through the opening bell and into afternoon trading. The Standard & Poor's index 500, a broader indicator of corporate America, likewise surged roughly 1.4 per cent.
Stocks held onto their gains and pushed them higher in the last hour. The Dow finished up 455 points, or 1.9 per cent to 24,331, ending the week with a total gain of 2.4 per cent. The blue chips closed above 24,300. The S&P 500 finished the day at a 1.7 per cent gain, to 2929, and closed the week up 3.4 per cent.
The Nasdaq composite was up 1.5 per cent Friday and nearly 6 per cent on the week.
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US jobless rate is highest since Great Depression
May 8, 2020 – 11.04pm
Washington DC | The US unemployment rate hit 14.7 per cent in April, the highest rate since the Great Depression, as 20.5 million jobs vanished in the worst monthly loss on record. The figures are stark evidence of the damage the coronavirus has done to a now-shattered economy.
The losses reflect what has become a severe recession caused by sudden business shutdowns in nearly every industry. Almost all the job growth achieved during the 11-year recovery from the Great Recession has now been lost in one month.
The collapse of the job market has occurred with stunning speed. As recently as February, the unemployment rate was a five-decade low of 3.5 per cent, and employers had added jobs for a record 113 months. In March, the unemployment rate was just 4.4 per cent.
The government's report Friday noted that many people who lost jobs in April but didn't look for another one weren't even counted in the unemployment rate. The impact of those losses was reflected in the drop in the proportion of working- age Americans who have jobs - just 51.3 per cent, the lowest on record.
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I look forward to comments on all this!
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David.
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